Competition remains sticky issue for ACA exchanges, but are concerns overblown?

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Amid all the uncertainty surrounding the fate of the Obama administration’s signature healthcare legislation, one of the more prominent issues has been the dwindling competition on the public health insurance exchanges.

But that issue may not be as significant as news reports and some policymakers suggest, Centers for Medicare & Medicaid Services Acting Administrator Andy Slavitt told reporters at an Association of Health Care Journalists event Thursday evening.

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Andy Slavitt
Andy Slavitt

Health insurance organizations such as Aetna, UnitedHealth, Oscar and some Blue Cross Blue Shield plans, among others, have pulled back their marketplace participation for 2017, many citing financial losses. And a recent Kaiser Family Foundation analysis of 2017 plan offerings conducted on behalf of the Wall Street Journal found the number of regions featuring only one insurer will rise from 7 percent of all U.S. counties to 31 percent.

Even so, “we have to differentiate between what’s a consumer problem and what’s a market or structural problem,” Slavitt said.

Many people, himself included, Slavitt said, have had just one health plan to choose from throughout most of their lives. “From a consumer standpoint, most people don’t view that as a problem,” he added.

Competition in any market, he acknowledged, helps drive innovation and lowers prices for consumers. But limited insurer competition in rural areas was a problem before the ACA took effect, Slavitt noted. Plus, in the Affordable Care Act exchanges, there are multiple levers that ensure plans are still affordable even when competition is lacking, such as cost-sharing subsidies.

News emerged this week that for consumers whose plans have been discontinued due to insurer exits, Healthcare.gov will steer consumers to new, similar plans. For his part, Slavitt said that consumers will still have multiple chances to choose a plan during open enrollment.

Neera Tanden

Still, concerns about competition on the exchanges have spurred Republican lawmakers to suggest allowing customers to use government subsidies to buy insurance outside of the exchanges, or letting individuals avoid the penalty for lacking insurance if they live in a county with one or no health insurers offering an ACA plan.

Democrats, including President Barack Obama, also have renewed their push for a public option on the exchanges, hoping a government plan would mitigate the effects of insurer monopolies.

Indeed, many people are worried about a single insurer having control over certain ACA marketplaces, Center for American Progress President Neera Tanden said during another panel discussion Thursday. Tanden, who was a part of Obama’s healthcare reform team, added that in her view, Hillary Clinton is serious about pursuing a public option.

William Hoagland

“This is a strongly held view in the Democratic Party,” she said.

Regardless of the outcome of the election, many Republicans are moving toward embracing policy adjustments to the ACA rather than full repeal, said William Hoagland, senior vice president at the Bipartisan Policy Center.

There are several modifications surrounding the ACA and healthcare policy in general that have bipartisan support, such as revisiting the issue of the Cadillac tax, said Hoagland, a former senior budget adviser to Senate Republicans. But one issue in particular, he added, is likely to deter any efforts at compromise.

“The thought that you’re going to have a public option put back on those exchanges, I think that would blow it up,” he said.

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