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One-Third of Nation May Lack Choices in Obamacare Exchanges

By Erin Mershon, CQ Roll Call

August 19, 2016 -- Nearly 36 percent of the country could have just one or no insurers participating in the local health insurance marketplace, according to a new Avalere analysis released Friday.

In 2016, only 4 percent of the regions used for setting payment rates had one or fewer participating carriers.

More than half of the country would have two or fewer insurers to choose from, the report notes. Just 33 percent had two or fewer participants on the exchanges in 2016, which were created under the Affordable Care Act.

The figures present a difficult situation for the president's signature legislative achievement, which relies partially on market competition among insurers to keep premiums low and health care affordable. Insurance companies like UnitedHealth Group Inc., and Aetna Inc. have announced major withdrawals from many of the counties in which they currently offer plans, citing financial losses they say are unsustainable. Elsewhere, some smaller and nonprofit co-op plans have announced their intention to close or been forced to do so by regulators.

"Lower-than-expected enrollment, a high-cost population, and troubled risk mitigation programs have led to decreased plan participation for 2017," said Dan Mendelson, president of the Avalere consulting firm, in a statement. "Congress and the Administration can choose to stabilize these markets and re-establish competition—but only through a consensus process that brings in a broader swath of the uninsured."

The situation is worst in seven states where Avalere found that every region in the state would have only one participating insurer. Those include Alaska, Alabama, Kansas, North Carolina, Oklahoma, South Carolina and Wyoming. Currently only one county in the United States—Pinal County, Arizona—has no insurance companies planning to participate.

Avalere's analysis assumes no new plans will enter the markets where other plans withdraw, which is not guaranteed. It specifically does not take into account some plans' announcements that they will expand their participation, which have not yet been finalized. More plans could also decide to withdraw before participation agreements are finalized next month.

In the meantime, the Obama administration and state regulators can work to encourage insurance companies to enter new areas or offer new products.

In Arizona, for example, the administration is "working collaboratively with the Arizona Department of Insurance," according to Ben Wakana, a spokesman for the Department of Health and Human Services. Wakana said the agency remains "confident that all Arizona residents will have access to coverage next year."

It is not clear how individuals who rely on the health law's subsidies—for which consumers are eligible only if they purchase coverage on an exchange—could obtain coverage if they reside in an area where there are no plans offered on the exchange. The Obama administration didn't comment on the issue when asked earlier this week.

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