ACA marketplace participation is on the upswing in 2019. But rural areas are still struggling

Healthcare.gov
The individual mandate repeal threatened the stability of the individual ACA marketplaces, but new companies are still set to enter the markets next year. (Getty/Halfpoint)

After years of high-profile insurer exits, the ACA marketplaces are finally set to increase participation again.

But not all counties will share that benefit.

The marketplaces will average four insurance companies per state, according to a projection from Kaiser Family Foundation (KFF), up from an average of 3.5 this year. That equates to 58% of enrollees having access to three or more insurers in 2019, up from 48% this year.

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"Going into 2019, 608 counties are gaining at least one insurer, while only five counties nationwide will lose an insurer," KFF wrote.

Insurance participation in the marketplaces has been on the decline since 2015, when it peaked at an average of six insurers per state—ranging from one in West Virginia to 16 in New York. But the years since then haven't been kind to Obamacare, and insurer participation has subsequently dropped every year.

It fell to 5.6 insurers on average per state in 2016 and then to 4.3 insurers by 2017. So even with the 2019 increase, states will still have fewer participants than even two years prior.

However, these averages can mask even greater inequity at the county level. As Kaiser noted, "Insurer participation varies greatly within states, and rural areas tend to have fewer insurers. On average, metro-area counties have 2.3 insurers participating in 2019, compared to 1.8 insurers in non-metro counties."

Since insurers frequently opt not to offer coverage in rural counties—even in states where they operate—77% of counties are still only being served by one or two insurers.

On the bright side, since these counties are sparsely populated, only 43% of enrollees live in one of them. But still, the people who do live there are left with individual markets without sufficient competition. This tends to increase premiums for beneficiaries even as it offers them fewer coverage options.

RELATED: ACA marketplace competition has dropped sharply in the Trump era

Now that the individual mandate has been repealed, consumers aren't required to get healthcare coverage. That means marginally more potential beneficiaries in rural or underserved counties may decide to go uninsured.

It's unclear exactly what effect the mandate repeal will have until the Healthcare.gov enrollment figures finish coming in. According to CMS, 1.18 million consumers have selected plans through the federal exchange so far, but this tells us very little since open enrollment extends until Dec. 15.

But if enrollment does decline from last year, it could mean further trouble for the marketplaces. The individual mandate was intended to keep healthy people in the marketplaces, bringing down premiums on average. But if those people leave the marketplaces, the concentration of sick enrollees could upend marketplace stability.