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Analysis

Health Plans Leave Middle Class With Few Options

By Gregory A. Freeman  
   December 20, 2017

A significant portion of American consumers make too much money for health insurance tax credits but can't afford standard health plans.

Health plan leaders and politicians have left a large swath of Americans with few choices when it comes to obtaining health insurance.

The enrollment period that ended Friday saw consumers in many states seeking individual coverage and facing limited choices, after insurers pulled out of their markets because of high-utilization costs that made policies unprofitable. The insurers left in some of those states offered only plans with high premiums and deductibles.

Consumers experienced the most difficult decision-making during the enrollment period since the Affordable Care Act was enacted, says a leading broker.

Related: How 4 Healthcare Measures Weathered Tax Bill Reconciliation

Insurers are pushing away many consumers as they find ways to work around the ACA's challenges to their profitability, says B. Ronnell Nolan, HIA, CHRS, president and CEO of Health Agents for America, which represents health insurance brokers who work with consumers seeking coverage both on and off the state exchanges. 

Companies have become more involved with Medicare Advantage and Medicare supplemental policies, for example, as a way to remain profitable even though the group and individual markets have proven difficult in many states.

"The consumers are struggling to be able to pay for insurance," she says. "The companies enjoyed their cost-sharing subsidies to keep the payments rolling in every month, whether the consumer got anything out of that coverage or not.

"This year, those folks that were above 138% of poverty to about 250% of poverty got a better deal than they've gotten in the past, because they got a tax credit that more than makes up for the premium increase in a lot of cases," Nolan says. "Those folks who were above 400% of poverty had to make hard decisions whether they could afford some type of insurance or … going without and paying the penalty. The conversations with those folks were hard, sad, and depressing at times."

Plan options for helping with healthcare costs

Consumers above 400% of poverty felt the entire wrath of the premium and deductible hikes, she says. If they found the plans available on the exchanges untenable, they generally had to choose between three options: the Christian Ministries plan, short-term medical plans, or going without coverage. However, as Congress has debated the tax bills that include eliminating the individual mandate, it has made the option of forgoing coverage a bit easier for some.

Gregory A. Freeman is a contributing writer for HealthLeaders.


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