The health insurance industry has been slowly adapting to the various ins and outs of the Patient Protection and Affordable Care Act over the last few years, with participation in the federal and state governments' coverage exchanges chief among them. To that end, it's important to note that the transition has not been particularly easy, and some say they're losing so much money on those efforts that they might not continue to participate in the future.
Two of the nation's largest health insurers have already openly questioned the long-term viability of the exchanges as they are currently constituted, according to a report from the Associated Press. Further, one has said that its loss of roughly $475 million in just a few years thanks to its participation in the exchanges could lead it to stop those efforts for 2017. In addition, a number of cooperatives nationwide to help people get insurance have been shuttered since the exchanges opened, impacting more than 750,000 Americans.
What would happen next?
If major insurers were to start pulling out of the exchanges, either one at a time or en masse, the affect on the entire health insurance market would be massive, the report said. It would lead to fewer choices - and therefore less competition - nationwide, which would likely result in higher prices for consumers as well. Indeed, enrollment has been steadily increasing in the Healthcare.gov exchanges for each of the past few years, but those people would likely end up facing some troubling decisions if insurers stopped participating, especially because there are many parts of the country where competition among these companies is relatively diminished to begin with.
However, some experts say that these exchanges weren't likely to be successful so soon after they were created, the report said. The idea that millions of uninsured Americans would sign up all at once was probably never going to happen, but that slow but steady increase in sign-ups seen over the last few years should continue, and therefore bring more incentive to major insurers to continue their participation.
"Sometimes I think of (the exchanges) as a little campfire that's going to grow, but right now it needs a little more oxygen or kindling," Katherine Hempstead, director of health insurance coverage programs for the Robert Wood Johnson Foundation, a nonpartisan organization that has assisted state governments on ACA insurance expansions, told the news organization.
Dealing with higher costs
In addition to all this, the problems with the exchanges are, in some ways, broadly acknowledged, the report said. Consequently, there may be some help coming for beleaguered insurance companies in the form of government programs, but whether that's enough to keep them enticed is another question entirely, which cannot reasonably be answered quite yet.
This is clearly something that health insurers will have to monitor closely as time goes on, but there's little to be done at this point because it's the middle of the year, and open enrollment periods are still months away.