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Loss of Exchanges Would Complicate Health Insurers' Strategies

By Gregory A. Freeman  
   March 08, 2017

Reverting to a pre-ACA insurance market model may be more challenging to commercial payers than dealing with the competition of the exchanges.

Health plan executives are busily developing strategies for surviving the next incarnation of the Affordable Care Act or its successor, and they all are factoring in their new competitor–the exchanges created under the healthcare law. Eliminating that competition actually might not be in their best interests, however.

The exchanges may survive in some fashion or be eliminated, and either result will be a major determinant in how health plans move forward, says Hector De La Torre, executive director of the Transamerica Center for Health Studies, a non-profit division of Transamerica Institute.

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"Whether they were in the marketplace or not, they had to take the exchanges into account. If they are just in the traditional insurance market, direct-to-consumer, they still have to take into account what the pricing and benefit structure was in the exchange because they're competing against it," De La Torre says.

"The exchanges have become a significant player in the health insurance market, and you don't just shrink or eliminate that payer and not have it affect the rest of the market."

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Removing ACA requirements and eliminating the exchanges would essentially take the insurance market back to 2010, the pre-ACA era, De La Torres says. If essential health benefits are removed, for instance, insurers will be free to sell skinny plans with limited coverage or catastrophic plans, De La Torre says.

"The problem is this isn't 2010. We're seven years later and we've had this other experience. Consumers have had this other experience and that will affect their expectations," he says.

Gregory A. Freeman is a contributing writer for HealthLeaders.

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