GREENSBORO, N.C. — More than 250,000 people in North Carolina are losing the health plans they bought under the Affordable Care Act because two of the three insurers are dropping out — a stark example of the disruption roiling marketplaces in many parts of the country.
The defections mean that almost all of the state, from the Blue Ridge to the Outer Banks, will have just one insurer selling ACA policies when the exchanges open again for business in November. The remaining company, Blue Cross Blue Shield of North Carolina, agonized over whether to leave, too. Instead, it is raising its rates by nearly 25 percent.
In no other state will as many people find such limited choice. But what is happening to nearly a half-million North Carolinians epitomizes a national checkerboard of ACA haves and have-nots.
The waning competition — and the financial losses that have prompted insurers to jilt so many ACA customers — pose fresh challenges to the marketplaces as they enter their fourth year.
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In its final months, the Obama administration insists the exchanges are still viable. And according to an analysis by the Kaiser Family Foundation, 60 percent of Americans in the marketplaces will be able to pick from three or more insurers for 2017, each selling multiple health plans.
That is an erosion from a year ago, however, when more than 85 percent had such wide choices. And the whittling has been concentrated in certain places. For the coming year, Oklahoma and Alaska will join Wyoming in having just one insurer selling ACA plans.
Perhaps the greatest contraction is occurring in the Southeast. Alabama and South Carolina will have one insurer statewide. Nearly three-fourths of Florida’s counties and more than four-fifths of Mississippi’s will be down to one insurer. So will 95 of North Carolina’s 100 counties.
Administration officials maintain that the geography of these departures essentially returns to a pattern predating the 2010 health-care law, when insurance options tended to be scarce in rural America. But in several states, the have-not parts of the checkerboard include urban centers. In North Carolina — where more than 600,000 people have embraced ACA coverage, more than in all but a few large states — marketplace shoppers in Charlotte, Winston-Salem and Fayetteville will find but one insurer.
The turbulence is especially palpable in the rolling Piedmont in and around Greensboro. Of more than 30,000 people here who have gained ACA insurance, 80 percent have been relying on United Healthcare or Aetna Health, the insurers pulling out of the marketplace at the end of December.
“Wow, it is going to be huge,” said Natalie Cunningham, a 30-year-old hairdresser who had been uninsured for years before she got her first ACA coverage in 2014. Her health plan enabled her to see a chiropractor who diagnosed her neck and back pains as arthritis that probably was a remnant of a decade-old car accident.
As of a week ago, Cunningham had not yet received the letter required of her current insurer, an Aetna subsidiary called Coventry, informing her that she needs to find different coverage. But she is like many residents in worrying how much insurance will cost in the coming year. Or whether they will be able to continue to see the same doctors. Or how their narrowing choice will affect the hopscotch they have been playing year to year in pursuit of a health plan they can afford.
At the Legal Aid office downtown, one of North Carolina’s many foot soldiers in helping people use the marketplace has started to get anxious calls from clients losing their health plans. “My job is to reassure people they are going to be fine,” Emily Rhyne said. But without yet knowing exactly what will be available, she is careful not to overpromise.
As companies have announced their withdrawals here and elsewhere, they have noted that their ACA customers have been sicker and more expensive than they expected.
In Durham, at the sparkling-glass headquarters of Blue Cross Blue Shield of North Carolina, the economics of those customers are a real concern. For 2014 and 2015, Blue Cross lost $405 million on its marketplace business. Suddenly becoming the health-care law’s sole insurer in all but a few counties is an unwelcome prospect.
After United and then Aetna announced they were leaving, Blue Cross said it might not stick around either. It had a quarter of a million unexpected customers heading its way, with no clue as to how much medical care they use and too little time to hire and train enough customer service workers.
The timing for its decision to stay or go was especially inopportune. Last month, the North Carolina Department of Insurance fined Blue Cross $3.6 million — a state record — over computer problems last winter that left some customers without insurance cards and some doctors without payments.
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Only a few weeks ago did Blue Cross announce that it would remain statewide for 2017. “The easy thing to have done would have been to quit,” chief executive Brad Wilson acknowledged in an interview. He said that staying involves “some reputational risk” and that he hopes customers will be patient with an “extraordinary environment here in our state, where all our competitors decided to flee and we decided to . . . stand in the gap.”
Blue Cross is trying to calibrate the expectations of consumers and government regulators alike, warning that customers may encounter long holds on call lines and urging them to sign up early.
Rates will soar. Blue Cross raised 2016 premiums for its marketplace plans by one-third, on average, making its coverage in Greensboro and some other communities more expensive than its competitors’. It sought another 19 percent increase for 2017, then asked for more after Aetna’s decision.
While the state will not disclose final rates until late this month, Wilson confirmed that regulators have agreed to the higher amount, an increase averaging about 24 percent — a main reason the insurer is staying.
The ripple effect on consumers will vary. Blue Cross is emphasizing that the higher the insurance premiums, the larger the government subsidies for the vast majority of ACA customers who qualify.
Here in Greensboro, Keith and Erin Rosen have no such buffer. They chose a Blue Cross plan on the marketplace after the scrap-metal company for which he was chief financial officer was sold and he left. The Rosens, who are both 54, appreciate that the health-care law lets them keep their three young-adult children on their policy. But with his consulting income too high for ACA subsidies, their 2016 premiums spiked by nearly $7,000 — to almost $27,000 total.
Expensive though it is, they cannot imagine being without coverage, particularly this year. He needed repairs of a hernia and a detached retina. She learned on April Fools’ Day that the lump under her left arm was a form of chronic leukemia.
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Lately, Keith Rosen has begun talking with a few business friends about forming a small company — just to get out of the marketplace and buy insurance collectively. The idea of paying more than $30,000 in insurance premiums is “tremendously annoying,” he said. “Where does it stop?”
Cunningham has no idea what she will be paying, but she already knows the complications of insurance-hopping. A single mother, she works full time at a Great Clips franchise that does not offer health benefits. Her income — $29,000 last year — allows her elementary school-aged daughter and son to be on Medicaid. But not her, which is why in the past she had waited in lines at the county health department or avoided doctors. When she cut the chiropractor’s hair, she used to make up excuses for why she did not see him for her back and neck pain.
In spring 2014, she asked another customer what he did for a living and learned he was signing up people for the new marketplace coverage. The first two years, she paid $56 a month for a Blue Cross plan. This year, even with her subsidy, that shot up to $139.
Cunningham switched to her Coventry plan, which costs her $9 a month, even if all the doctors are in High Point, where she does not know her way around. So she recently ended up back at the county health department for an infection and has been putting off an ultrasound she should have had months ago.
If she goes back to Blue Cross, her monthly payments might go down. If they go up, she might work extra shifts at other hair salons.
Or, she figures, she might go back to being uninsured.