As the Obamacare individual mandate comes under threat of repeal from the Senate tax bill, other nails in the coffin of the law are being hammered in by insurance companies. As of last year, five states were left with only one insurance carrier for their residents. In 2018 some 29% of current enrollees on the federal exchange in eight states, including residents in Alaska, Delaware, Iowa, Mississippi, Nebraska, Oklahoma, South Carolina, and Wyoming, will be left with a single insurance carrier.
This past year, the news has been littered with news of large companies such as Aetna, Anthem, and Humana leaving or heavily downsizing their presence in the Obamacare marketplace. As a result, only 132 insurers will offer policies on the federal exchange next year, down from 167 this year and 237 in 2016. Outside of the states’ marketplaces, enrollees will likely have 25 plans to choose from, down from 30 this year.
Insurance companies in the exchanges had been propped up for years by subsidies put in place by the Obama Administration’s health care law, but the bailout suddenly came to an end with an executive order by President Trump. In October, US District Judge Vince Chhabria in San Francisco upheld the order, declaring the federal government did not have to make the payments while litigation over the subsidies unfolds.
The insurance mandate has also been a subsidy for Obamacare itself. The Congressional Budget Office has estimated the total savings for taxpayers to be $338 billion through 2027 if the requirement were to be repealed, due to fewer people seeking subsidized coverage. The mandate has consistently polled as the most unpopular provision of Obamacare.
The increased cost of insurance due to Obamacare has also affected the business of medical practitioners. In fact, physicians are also ditching insurance companies in favor of running cash-only establishments. This model has the benefits of increased price transparency for patients and lower consumer costs, as well as cutting overhead costs for the doctors.
It seems every actor in the marketplace understands the failures of Obamacare and wants out. But after the recent botched efforts of Republicans to put forward a new health care plan, Congress isn’t expected to get back to work on reform legislation until next year.