ACA exchange to offer fewer, and more expensive, plans locally

Houstonians who purchase health insurance through the Affordable Care Act's exchange will have dramatically fewer options in 2017, with half the number of carriers participating as last year. And premium prices will rise by more than $200 per month for some plans.

With a week to go before the fourth enrollment season opens on Nov. 1, the healthcare.gov website on Monday publicly previewed a slimmer array of plans that will be available for next year. The plans are generally more expensive, too. The national average increase of 25 percent in benchmark silver-plan premiums.

U.S. Department of Health and Human Services officials sought to downplay the rate increases in a national press call. A statement specific to Texas pointed to the progress made in lowering the uninsured rate and said 84 percent of enrollees in Texas would qualify for subsidies to lower their premium costs.

"Thanks to financial assistance, the large majority of current marketplace consumers in Texas will be able to find plans with premiums between $50 and $100 per month," Secretary Sylvia Burwell said in the statement. She also estimated that 252,000 Texans currently paying full price for plans off the exchange could find coverage on the exchange in 2017.

For months many have worried what next year's health insurance landscape would look like as major insurers abruptly abandoned the federally mandated marketplace and those who remained demanded double-digit rate increases to counteract losses.

In Houston, at least, many of those fears appear to be realized.

Locally, the federal exchange for 2017 will feature plans from only three insurance companies: Molina Marketplace, Community Health Choice and Blue Cross and Blue Shield of Texas. In 2016, there were seven.

The overall number of plans on the exchange has dropped to 26 next year from 52 in 2016, according to healthcare.gov.

"This is disconcerting," Vivian Ho, an economist at Rice University's Baker Institute for Public Policy, said Monday.

Enrollees who do not qualify for the federal subsidies that rise along with premiums will face the full brunt of the hikes.

"The bigger concern is those who don't qualify," she said.

Another worry is shrinking competition.

"When more insurers compete, prices go down," Ho said.

In April, UnitedHealthcare announced it would not offer any exchange plans in Texas. By August, Aetna and Cigna telegraphed they, too, were leaving the exchange in the state. Humana, previously vague about its plans, is nowhere to be found on the exchange list released Monday.

All four carriers offered exchange plans to Houston-area residents last year. Cigna has said it will sell plans off exchange, but that means customers would not be eligible for subsidies to lower the price.

"It's unavoidably true that the more carrier exits there are, the more involuntary changes there will be," said Katherine Hempstead, senior adviser at the Robert Wood Johnson Foundation. "Without a doubt more people will end up shopping who didn't want to," she added.

That includes people like Ramon Cinco, 43, a middle-school teacher and father of two in Channelview. His employer-sponsored health care coverage is so expensive that the law allows him to acquire coverage on the exchange.

For 2014, the first year of enrollment, he signed up with Aetna but found the network of providers too narrow. His son suffers from asthma and often could not see the specialists he needed.

The following year, Cinco switched to Cigna, which had a much broader network. He loved that plan, but the insurer dropped it at year's end and he was forced to look for something new.

He returned to Aetna for 2016. Now, Aetna is pulling out and he has to start over for the fourth time.

"I am devastated," he said as classes ended Monday and he logged onto his computer. "I have to tell my wife the bad news. I'm not sure what in the world I'm going to do."

He worries for his family. He's not sure whether he should be angry with the insurance companies that keep raising prices and narrowing plans or with the officials in Washington who once promised affordable choices.

"We don't have a voice in that," he sputtered in frustration.

The difference one year can make is stark. The average cost of a bronze plan for an individual without a subsidy in 2017 is $379, up $92 from last year. The average price for a silver plan will be $425, up $82 from 2016.

The biggest jump comes in the higher-coverage gold plans. For 2017 the average gold plan will be $491 compared to $398 last year.

Also, one platinum plan was offered in 2016. This year there are none.

Blue Cross and Blue Shield of Texas, the state's largest insurer, showed the biggest price increases. Last month the Texas Department of Insurance allowed the carrier's request of a nearly 60 percent rate increase in some of its plans to stand.

Next year the most expensive plan offered on the exchange comes from Blue Cross and Blue Shield at a price of $679.48. A year ago, the same plan was $463.95.

Ken Janda, president and CEO of Community Health Choice, which offers seven plans for 2017, said his company initially asked for a 6.9 percent rate increase last spring. But he revised the rate increase request to 20 percent when he found out in August that Community Health Choice would benefit less than expected under provisions in the Affordable Care Act designed to help some companies stabilize in the early days of transition.

Janda admits the price increases could have a chilling effect on some new customers who do not either qualify for or know about subsidies, he is confident existing customers will remain.

That's what Sara Speer Selber is likely to do, though she is not thrilled with her choices.

The 59-year-old Houstonian, founder of a consulting firm, has a Community Health Choice plan that currently costs nearly $400 in premium without a subsidy. The plan's $5,000 deductible meant when she needed emergency care for a bladder infection a few months ago she forked over $700 up front because she had not met her deductible.

When she needed an EpiPen for her allergy it cost $600 out of pocket. So she skipped it.

Many watching the unfolding drama predict the turmoil in the exchange could be temporary. Insurers have argued they needed to adjust offerings and raise prices because they miscalculated the cost of covering people on the exchange. Under the health-care law it is no longer legal to deny coverage of someone who has a chronic illness or a pre-existing condition.

Opponents of the law likely will seize on this year's troubles as proof it is failing, Ho said. But she emphasized that while some have been hurt by rising prices, more have been helped by finding coverage, sometimes for the first time.

"What people forget is we can't go back to how it was before," she said.

About 1.3 million Texans signed up for coverage on the exchange for 2016. Since the law took effect the uninsured rate in the state has dropped to about 17 percent, down from more than 25 percent.

Still,Texas leads the nation in the number and rate of uninsured. About 1.1 million people in the Houston region are uninsured, according to 2015 U.S. Census figures.