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Continued financial struggles for insurers that participate on exchange markets will alter the composition of health plans available on insurance exchanges in 2017.
A new analysis by McKinsey&Company of preliminary 2017 exchange plan designs shows that 75 percent of offerings on exchanges will be health maintenance organizations (HMOs) or exclusive provider organizations (EPOs). The analysis looked at regulatory filings from 18 states and the District of Columbia.
The report adds that while most consumers will have access to either an HMO or EPO, less than a third will have access to a menu of HMO, EPO, preferred provider organization (PPO) or point-of-service plans.
HMO plans “tend to have higher margins and lower rate increases,” Erica Coe, a McKinsey partner and leader in healthcare reform research, told The Wall Street Journal.
While PPOs are popular for consumers because they provide them with more freedom to choose their doctors and hospitals, high utilization rates have proved financially untenable for many insurers.
For the 18 states McKinsey used to conduct its research, the consulting firm found that approximately 15 percent of exchange-eligible consumers are not scheduled to have any PPOs to choose from.
Aetna, Oscar, UnitedHealth and Scott & White have all said they will substantially reduce their 2017 exchange offerings, eliminating a lot of PPO offerings in the process.