by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Obamacare is facing a new challenge after a wave of insurance companies have said they’re leaving the health law’s marketplaces — dwindling patient choices from the insurers who remain.
Blue Cross-Blue Shield nonprofit insurers are largely staying in Obamacare markets, but to contain costs, some are moving toward HMO plans with narrower networks. The shift is part of a growing trend on the exchanges as plans with broader networks are losing money.
An Obamacare regulation also is driving some Blue Cross insurers away from preferred provider organization plans, or PPOs, that allow patients to choose their doctor outside of the insurer’s network. An HMO requires a patient to use a doctor inside the network and get referrals for specialists.
Aetna announced earlier this week it is leaving Obamacare exchanges in all but four states next year. It is the latest insurer to pull out because of financial losses, with Humana and UnitedHealth exiting Obamacare markets in 2017.
Experts say part of the reason for the losses could be insurers’ broader networks, especially as the Obamacare enrollee population was sicker than expected.
“Since [the insurers] have broader networks they could be getting worse risks,” said Jeff Holahan, institute fellow at the left-leaning Urban Institute. “If you have had problems, such as cancer, you will not want to be in a limited network plan.”
Other experts have said there has been a general shift in the marketplace away from PPOs and toward narrower networks.
“Now that insurers can no longer exclude people with pre-existing conditions, they’re finding it difficult to make money on plans with broad networks of doctors and hospitals and out-of-network coverage,” said Larry Levitt, senior vice president for nonpartisan Kaiser Family Foundation.