The effects of several co-ops failing and United Healthcare (United) potentially exiting the marketplaces, could be overstated, according to a report authored by researchers at the Urban Institute and funded by the Robert Wood Johnson Foundation. The report examines 81 of the most populous areas of the country to find which insurers offer the lowest-cost silver plans, which typically have the highest rates of enrollment among marketplace plans.
Of the 81 regions studied, co-ops are active in more than a quarter of the regions (22) in 2016, while United, which recently announced its intentions to exit the marketplaces in 2017, operates in roughly 60 percent (48). Ordering insurers by the lowest premium silver plan each offers, co-ops are the lowest- or second-lowest-cost insurer in 14 of the 81 rating regions studied. United is the lowest cost or second-lowest-cost insurer in 15 of the 81 regions studied.
The authors of the report note the effects of the potential United exit and any future exits by co-ops would be felt mostly in regions where they are one of the more price-competitive insurers, noting that regions in which they are more expensive than their competitors likely signals low enrollment in the plans.
Among the 81 regions, Blue Cross insurers and managed care organizations previously offering insurance to Medicaid beneficiaries,but new to the private market, are the most price-competitive. Blue Cross and Medicaid managed care organizations are among the lowest-cost insurers in 34 and 44 of the 81 regions, respectively.
“A potential withdrawal by United or any other national carrier would be important in terms of what it might say about the stability of the marketplace, but in terms of consumer options, no unfillable void would be created were they to leave,” said Kathy Hempstead,who directs coverage issues at the Robert Wood Johnson Foundation. “In the case of the co-op failures, while some of those closures were abrupt and affected large numbers of consumers, other options were available on the marketplace.”
The report authors note that the marketplaces are not without issues. The authors identify affordability concerns, network adequacy (i.e., the scope of hospitals and physicians covered by plans), and a sicker, more expensive customer base as issues that need further studying.
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To speak with a researcher about the report’s findings, please contact Frank Walsh at 504-309-5164 or [email protected].
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