The final Obamacare open enrollment of President Obama’s presidency starts Tuesday with enrollees facing fewer insurers and higher premiums for health coverage.
However, the impact will largely depend on where the enrollee lives, as some states are faring far worse than others in plan offerings and rates.
The administration wants to get 13.8 million people to sign up between Nov. 1 and Jan. 31, and it hopes about 11 million will pay for coverage throughout 2017. However, some experts doubt whether the administration can reach that goal because of higher plan costs.
This year’s open enrollment period is critical because the administration has sought to expand enrollment to improve the healthcare marketplace’s risk pools and ensure insurer participation after some high-profile defections.
About 10 million people paid for Obamacare in the first half of the year, which pales in comparison to the roughly 150 million who get insurance through their jobs.
A lack of competition and higher premiums are going to be an issue for some Obamacare customers in 2017, but the impact will vary drastically by state and county.
In 2017, several major insurers decided to leave most of the marketplaces they offer plans in. UnitedHealth will pull out of many of the 34 states where it offered plans, and Aetna will shrink its Obamacare presence by 70 percent.
Humana will leave four of 15 states, and most consumer oriented and operated plans have shut down because of financial problems. Only six of the original 23 co-ops remain, with Maryland’s planning to turn into a for-profit plan.
Part of the reason for the defections is losses in the individual markets. UnitedHealth, for instance, has said it plans to lose $600 million in Obamacare this year.
The insurers that have stuck around are raising prices to compensate for a sicker-than-expected enrollee population that is expensive to care for.
The defections have left five states — Alaska, Alabama, Oklahoma, South Carolina and Wyoming — with only one insurer offering plans next year.
The number of qualified health plans being offered on average has dropped from 47 in 2016’s coverage year to 30, according to administration data. Consumers will have an average 10 plans per insurer to choose from.
“If you live in Arizona, your experience this open enrollment is going to be a lot different than if you live in California,” said Jonathan Keisling, healthcare data analyst for the center-right American Action Forum.
Arizona will have two insurers and is facing an average rate increase of 116 percent for a 27-year-old who gets a second-cheapest silver plan, a popular Obamacare option. California, by comparison, will have 12 insurance companies and premiums will rise by an average 7 percent.
The administration said on Oct. 25 that premiums would on average rise by 25 percent, but rate hikes aren’t universal, Obamacare supporters said.
“While some areas are seeing large increases in premiums, other areas are actually experiencing decreases in premiums,” according to the advocacy group Families USA, which supports Obamacare, in a blog post last week. “Premium increases are not a universal experience across the country.”
For instance, a premium for a 27-year-old in Maine with the second cheapest silver plan will decline by 3 percent.
However, some states are seeing enormous rate hikes. Insurers in states such as Oklahoma and Tennessee received approval for increases of more than 70 percent.
The administration has responded to the news of price hikes by pointing out that a majority of people on the exchanges receive tax credits that rise to match any premium hikes. Nearly 85 percent of the exchange’s 2016 customers got tax credits, according to administration data.
But some experts counter that premiums aren’t the only thing that will rise for consumers.
“If you were buying on the exchange this year and next year you [will be] hit by a really big premium increase, chances are your deductible went up, and … your network of providers shrunk,” said Joseph Antos, health policy expert at the right-leaning think tank American Enterprise Institute.
Antos said the last thing insurers “want to do is raise premiums so they are more than willing to tighten up on the networks and squeeze on how the benefits are covered.”
Another reason is competition, as insurers don’t want to raise rates and be at a competitive disadvantage.
It is not clear how extensive the provider networks are on Obamacare plans.
A January study from the Blue Cross Blue Shield Association found that about half of the plans offered by Blue Cross insurers on the marketplaces had narrow networks.
The administration provides subsidies to reduce out-of-pocket costs such as deductibles, but only people who are below 250 percent of the federal poverty level are eligible.
The subsidies likely will keep Obamacare enrollment around 10 million, Keisling said.
However, that would be about 1 million below the administration’s 11.4 million estimate.
The administration has said it is expanding outreach to millennials and people who have previously had to pay the law’s individual mandate for not having insurance to shore up enrollment.
Obama still remains enthusiastic about the last open enrollment of his presidency.
“We’re not going to get much help from the media,” Obama told more than 25,000 volunteers on a White House call Thursday. He added volunteers must help to “clear the mud off the windshield” and get people to sign up.
