Entering the fourth year of open enrollment, which begins on Nov. 1, the Affordable Care Act exchange at healthcare.gov faces some of the most difficult challenges of its short life, health policy experts say.
Fewer insurance companies are offering coverage, both in Florida and in nearly all of the 38 other states using the federally run exchange. Not enough young and healthy people are signing up for ACA plans. And programs designed to limit insurers’ financial losses during the first years will be phased out in 2017.
The combination of factors has contributed to an average 25 percent increase in premiums for 2017 coverage, according to estimates released this week by the U.S. Department of Health and Human Services.
“There are definitely going to be some challenges in 2017. I think consumers can expect to see fewer insurers participating and higher premiums,” said Michelle Long, a health policy analyst for the nonprofit Kaiser Family Foundation and co-author of a report released this week examining premiums and insurer participation on the ACA exchange.
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According to the U.S. Department of Health and Human Services, more than 70 percent of consumers in states using healthcare.gov will be able to find 2017 coverage for less than $75 a month, and 77 percent will find plans with premiums less than $100 a month, after subsidies.
Enrollment estimates also have fallen below projections, with HHS officials estimating that 13.8 million people will sign up for 2017 coverage — nearly half the 23 million forecast when the ACA was passed in 2010. But there still was an increase of about 1.1 million or nearly 9 percent over the estimated 12.7 million people who selected plans during the 2016 enrollment period.
In Florida, premiums for 2017 coverage will increase by double digits, though not as much as the national average. State insurance regulators have approved an average 19.1 percent increase for 2017, with changes ranging from an average of 11.7 percent for Health First plans to an average of 36.8 percent for Humana Medical plans.
But even with those increases, most consumers on the ACA exchange will be shielded because the subsidies they receive — in the form of tax credits and reduced out-of-pocket expenses — rise along with premiums, ensuring that their coverage remains affordable.
“The subsidies limit how much you have to spend on insurance as a certain percent of your income,” said Cynthia Cox, an associate director for Kaiser. “The caveat is that you may have to shop around and switch plans in order to keep your premium payment low.”
You may have to shop around and switch plans in order to keep your premium payment low.
Cynthia Cox, associate director for Kaiser Family Foundation
In Florida, more than 90 percent of the estimated 1.5 million people who signed up for an ACA plan in 2016 receive a subsidy to help reduce their monthly premium, and about 70 percent receive additional financial aid to lower out-of-pocket expenses for co-payments and deductibles, according to HHS reports.
Though fewer insurance companies will be selling ACA plans in Florida in 2017 — five insurers next year compared to seven in 2016 — consumers in Miami-Dade and Broward counties will have more choice than consumers in the majority of states using healthcare.gov, most of which have three or less.
In Miami-Dade, consumers will be able to choose from more than 60 plans. According to the Kaiser analysis, the premium for Miami-Dade’s second-lowest cost standard plan, categorized as the silver level, is estimated to rise by about 17 percent for a hypothetical 40-year-old non-smoker earning $30,000 a year.
After receiving a subsidy, that consumer would see little to no change in the monthly cost, which would go from $208 in 2016 to $207 in 2017 — because the subsidy will increase along with the premium.
5 Insurance companies selling 2017 coverage on the Affordable Care Act exchange in Florida
But that does not mean premium increases do not matter, said J. Mario Molina, a physician and chief executive of Molina Healthcare, one of the five insurance companies selling ACA plans in Florida for 2017.
For the 1 percent of Floridians who bought ACA plans in 2016 but earned too much to receive a subsidy, premium increases will hit with full force in 2017. But Molina said he’s also concerned about the future sustainability of the ACA exchange.
“For the member it may not be that big of an issue, but for the federal government and the taxpayer who are having to pick up more of this premium, it threatens the sustainability of this program,” Molina said. “That’s why premiums really do matter. If we want to continue to make this a viable program, we have to find a way to control costs. Just saying we’re going to raise premiums is not a sustainable way.”
Molina is expanding its ACA exchange presence in Florida for 2017, selling health plans in eight counties, including Miami-Dade, Broward and Palm Beach. And while the company has focused on low-income consumers by building its ACA plans to resemble its Medicaid networks of doctors and hospitals, Molina said coverage can still be too expensive — especially for young consumers who don’t see a benefit in buying coverage they don’t expect to use.
“The No. 1 issue in healthcare is affordability,” Molina said. “”We have tackled part of the problem, which is access, by increasing insurance coverage. But we have incompletely addressed the cost issues.”