How the government could counter health plan defections from the exchanges

Aetna’s startling withdrawal from many Affordable Care Act exchanges has accelerated the search for ways to preserve competition in those markets.

Options include establishing government-run plans and requiring insurers to offer exchange products as a condition for participating in Medicare Advantage or Medicaid managed care—or as a concession for proceeding with proposed mergers.

In addition, policymakers are eyeing ways to increase enrollment of younger and healthier enrollees, hike premium subsidies to make coverage more affordable, and better protect insurers against the risk of high-cost enrollees.

With the November elections approaching, ACA supporters feel a growing sense of urgency.

“In the Senate and House races, Republicans will say the ACA isn’t going well, premiums are going up, companies are leaving and we really need a substitute,” said Robert Blendon, an expert in healthcare politics at Harvard University. “It gets people very nervous.”

But Aetna’s plans to exit 11 of the 15 states where it offers exchange plans may also give a boost to proposals by President Barack Obama and Democratic presidential candidate Hillary Clinton to establish public option plans.

“If carriers don’t want to play, why should they object to having a fallback public plan?” said Sabrina Corlette, a health policy expert at Georgetown University who co-authored a new report on strategies to stabilize the exchange markets.

The Center for American Progress, whose president is a close adviser to Clinton, is exploring the legality and operational details of establishing a linkage between participation in exchange markets and other public healthcare programs.

One challenge, however, is making sure insurers offer a genuinely competitive exchange plan rather than just going through the motions in order to be able to continue offering Medicare and Medicaid products, said Topher Spiro, CAP’s vice president for health policy.

Nevada’s state-run insurance exchange already ties exchange participation to its contracts with Medicaid managed-care plans. Anthem and UnitedHealthcare offer exchange plans and Medicaid plans in that state, and the arrangement is “working pretty well,” said Bruce Gilbert, executive director of the state-run Silver State Health Insurance Exchange in Nevada.

Along the same lines, Florida insurance regulators, as part of a recent agreement with Aetna approving its merger with Humana, recently required the insurer to expand its offerings on the state exchange. That was before the U.S. Justice Department filed suit last month to challenge that merger, as well as Anthem’s proposed deal with Cigna.