August 24th, 2016 | By: Harris Meyer
The hand-wringing over insurer pullouts and premium spikes in the Affordable Care Act exchanges is growing frantic since Aetna announced last week it would exit from the marketplaces in 11 of the 15 states where it currently sells plans. UnitedHealthcare and Humana previously had retreated from the exchanges, and others including some Blue Cross and Blue Shield companies say they’re bleeding red ink on their exchange business.
Everyone is scrambling for solutions, with liberals urging more regulation and conservatives less. Earlier this week, the prominent health economist Henry Aaron of the Brookings Institution offered what he called “simple way” to reduce the risk of more insurers leaping off the exchange ship.
“Make the Obamacare exchange one big marketplace for everyone buying individual health insurance coverage,” he wrote in an op-ed piece in the Washington Post. “Nationwide, this would merge the 12 million people who get their insurance through Obamacare with the roughly 9 million who buy their policies outside the exchanges.”
It’s an approach that insurers almost certainly would fight. But it’s something that state leaders around the country might consider because they could do it on their own without waiting for a deadlocked federal government to act. And it’s in line with other proposals to tie insurers’ participation in more lucrative lines of government business to selling products on the exchanges.
Washington, D.C., and Vermont already have merged their exchange and off-exchange markets for individual plans, and D.C. is in the process of requiring that all small-group products also be sold through the exchange. Both jurisdictions passed laws allowing the combination of these markets, and legislation would be necessary in other states as well. The federal government probably couldn’t do this on the federally run exchange without enabling legislation from Congress, which Republicans are unlikely to approve. Read more here.