Insurers Return To Obamacare Market Exchange Amid Big Subsidies

United Health Care and Ambetter will begin selling policies statewide Monday, when open enrollment for the Affordable Care Act individual exchange begins.

There are 51 plans on the individual health insurance market exchange in Louisiana for 2022, compared to 23 plans in 2021.

Ambetter has 19 different plans and the cheapest plan of $370 each month but most plans range between $400 to $600 a month in premiums.

Blue Cross Blue Shield of Louisiana has 18 plans for sale, while its subsidiary Vantage Health has another five plans on the marketplace. United Health Care has nine plans for next year.

More insurers in the market doesn't necessarily mean higher quality or lower prices for consumers, because companies may scale back the size of networks to undercut each other on prices, said Cynthia Cox vice president at Kaiser Family Foundation and director for the program on the ACA.

"There might not be as many high quality options because the way insurers compete here is that plans have smaller provider networks," Cox said. "This works well for people who are relatively healthy and low income people who are very price sensitive."

United Health Care left the Louisiana federal marketplace in 2016 which forced 29,000 people to find new health insurance plans.

In the beginning, insurers participating in the federal marketplace were "overly optimistic" because the companies didn't have enough data about the market so plans were too cheap for the businesses to make a profit. At its peak, Louisiana had 214,148 policyholders in 2016.

"There were a lot of challenges in the early years of the marketplaces, not as many people got insurance as was originally hoped for," said Katherine Baicker, a health economist and dean of the University of Chicago's Harris School of Public Policy.

Then insurers overcorrected and premiums were hiked up significantly, while some companies dropped out of the marketplace entirely. Meanwhile, Louisiana expanded its Medicaid program so some individuals qualified for that coverage instead.

"One of the challenges insurers worry a lot about is getting a good risk pool, both sick and healthy people, so premiums can reflect that rather than having only sick people," Baicker said. "There has been a little more clarity about what those marketplaces will look like and insurers have got a lot more data that predict the cost."

There were more than 100,700 people with plans from the individual health insurance exchange in Louisiana this year, about 17,600 of which were added during an extended enrollment period that was part of the federal COVID relief program.

That relief program included two years of tax credits through the end of 2022. No individuals buying healthcare on the exchange based on midlevel plan would spend more than 8.5% of their income on premiums. Some individuals would qualify for subsidies for the first time since the exchange began, such as those earning more than 400% of the federal poverty level.

The federal exchange has been successful in expanding insurance options for low income residents who qualify for subsidies but not so much for those who are paying full freight such as middle and high income individuals, many of whom are small business owners, Cox said.

Subsidies are now extended up to $51,520 for an individual and $106,000 for a family of four.

A hypothetical 45-year-old making $58,000 previously got no aid under the Affordable Care Act. With the new bill, they'd be entitled to a $1,250 tax credit, or 20% off their premiums, according to the Congressional Budget Office.

The extra subsidies under the coronavirus relief program are slated to expire by the end of 2022 but there's discussion about extending it.

"To a large degree it's the subsidies, that has been the No. 1 factor in keeping the markets alive," Cox said.

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