The number of health insurance plans sold outside of Obamacare’s exchanges fell by half in 2018, according to a study by the Robert Wood Johnson Foundation.
Plans sold outside the exchanges fell from 8,700 in 2017 to about 4,000 in 2018. Eight states had no plans that were sold outside the exchanges in 2018, compared with five in 2017.
The plans are sold outside of the exchanges but still have the same requirements, including that they must cover a range of medical services and cannot turn away customers with pre-existing conditions, such as diabetes or cancer, and cannot charge them more than healthier patients.
They differ from health insurance offered on the exchanges because they do not provide federal subsidies that make health insurance less expensive. By law, people making less than roughly $48,000 a year receive subsidies, while people making over that amount do not. An estimated 5 million people tend to buy directly from an insurer when they don’t qualify for subsidies, whether because it’s easier or because that particular medical plan might have a doctor or hospital in-network that they prefer.
In comparison, roughly 12 million people across the country buy on the exchange market, and about 80 percent of them do not pay full price for their premiums because the government helps to pick up the cost.
Authors of the report believe the trend will continue because congressional Republicans eliminated the Obamacare fine for going uninsured beginning in 2019, known as the individual mandate. The Trump administration also is providing people with alternatives for health insurance that will be less expensive but are likely to cover fewer medical benefits than Obamacare plans do.
They also point out that through the exchanges certain customers are paying less for coverage than in the past because of the way that health insurance companies have structured their plans. Some customers are paying no premiums, which is the result of insurers restructuring their plans to respond to actions from the Trump administration to remove funding in other areas.
Authors say that because fewer customers are expected to sign up for plans outside the exchange, it would stand to reason that a reduction in the number of plans offered would as well.
