Unitedhealthcares pulls out of Off Exchange Market; big increases expected by other carriers

June 15, 2016

May 31st, 2016 Unitedhealthcare sent a message to brokers and the media outlets that they will no longer be offering any individual health policies OFF Exchange beginning in 2017. Those individuals who have a UnitedHealthOne plan for 2016 can keep the plan through Dec 31st, 2016, at which time the policy will end.  Letters have already been mailed to many insureds who bought OFF-exchange plans; these letters are informing them their policy will end and the need to find a new plan for next year; they can begin shopping when Open Enrollment (O.E.) begins on Nov 1st.

In a separate email correspondence, UHOne announced they will be offering ON Exchange plans in a limited number of states, to be exact, 3 states only: Nevada, New York, and Virginia. The company that started a separate, wholly-owned subsidiary called Harken Health, will continue to offer plans In Cook County, IL, Atlanta, GA, and they are expanding to some areas in Florida. However, the company has plans to greatly change their plan designs, including changing the provider list that are available to people in Harken Plans, and possible moving to a 'referral-based' insurance model, similar to an HMO. No final decisions or information is available at this time, but those with Harken Health plans will want to read carefully any correspondence they receive at O.E. about plan changes for 2017. 

In the past two weeks since this announcement, there have been a series of articles about carriers who are staying in the market and what insureds can expect or 2017 rate increases; unfortunately, this news is not good. (NOTE: Only one other carrier - Humana - is contemplating leaving the marketplace, even though most carriers are experiencing huge losses.)  An article in The Hill said, "Many insurers have been losing money on the ObamaCare marketplaces, which is likely to lead to larger premium increases for next year, a trend that Republicans have seized on."

In a New York Times article on June 3rd, the insurance companies' Actuaries try to explain the situation. Dr. David T. Feinberg, the president and chief executive of the Geisinger Health System (a insurance provider in PA area who is asking for a 40% rate increase), said its health plan was losing $30 million a year on coverage sold on the federal exchange in Pennsylvania. But leaving the market here would be unthinkable. (Read more: http://www.nytimes.com/2016/06/10/us/health-insurance-affordable-care-act.html?_r=0) While actual, real company data shows insurance companies are losing their shirts on ACA/Obamacare plans, the government continues to suggest this is 'temporary' and they are just getting used to the law.

While the government continues to remind us the vast majority of the 12 million people going on exchange to buy plans are receiving subsidies (tax credits from the government that reduce the premiums they pay for health insurance), just as many millions or more people buy individual policies OFF exchange and pay the entire premium themselves, without government help. In April, before most insurers had filed their rate requests for 2017, the Obama administration began a campaign to play down the significance of rate increases. "Proposed rates aren't what consumers pay," the Department of Health and Human Services said. "Most people receive tax credits and can buy a plan for less than $75 per month."

I have been assisting individuals to buy plans on the Exchange since the start of the ACA, and never once in 3 years have I had anyone close to or even under $100/month. I have a client who found me on Get Covered IL and needed help navigating the govt' website; she makes $27k as a single woman, and qualified for about $250 in a tax credit; her premium AFTER the tax credit is still close to $250/month for the lowest cost Bronze plan; at $27k and paying ALL bills herself, she can barely afford the $250 subsidized plan with the $5000 deductible and one primary visit a year with a Dr. copay, deductible waived. Where are all these people paying $75? That's what I'd like to know!

On June 13th, the Associate Press published an article about some increases that have been filed by carriers around the country. Blue Cross Blue Shield of Texas is seeking an average premium increase of nearly 60 percent for 2017. In New York, insureds are receiving notices that increases can be from 8-25%; and in North Carolina, the largest provider is expecting to raise premiums 19%. (Read more: Associate Press.6.13.16 )

In Illinois, we have not heard yet what the insurance carriers are proposing, but in the last two years, the largest provider (Blue Cross Blue Shield of IL) has passed along 30-51% increases in both 2015 and 2016, effectively doubling premiums for many individuals while reducing access to providers and drastically changing or eliminating networks.

When does it end? When does the government say "this is not working" and "we need to fix this". While insurance companies are 'hanging in there' even though most are hemorrhaging money, how does the average, self-employed American or someone who does not get insurance through their employer continue to pay double-digit rate increases? At what point does this thing implode? ...When all carriers leave the marketplace? When individuals absorb the third year in a row rate increase of 40% percent? when people can no longer access any of their doctors or providers with ANY insurance plan? Inquiring minds would like to know.