AgileHealthInsurance Nationwide Survey | 08-30-2016

Most Americans Want Obamacare Penalty Waived When People Have Only One Insurance Company in Their Exchange

The market for Affordable Care Act insurance is expected to experience some significant changes in 2017. Alongside the possibility of major rate increases,1 in many counties across the U.S. there will be only one insurance company option offering Obamacare plans on a state health insurance exchange.2 The prospect of single-insurer markets presents multiple problems for consumers. The first is a lack of price competition, which is particularly problematic to consumers who are ineligible for premium subsidies. The second problem is a lack of insurance company options increases the likelihood of preferred doctors and hospitals being out-of-network if the only available insurer uses narrow networks.

Among the potential consequences of this situation are more consumers being unable to afford insurance within these single insurer markets or exploring alternative health coverage that includes their preferred doctors and hospitals. However, in both cases, consumers risk the “uninsured penalty” from the government if they lack coverage or if the coverage they choose is not compliant with Affordable Care Act standards.

In response to this situation, AgileHealthInsurance conducted a nationwide poll that explored whether Americans believe a penalty exemption should be offered in counties that have only one insurer when an individual does not qualify for subsidies or does not have an exchange plan option that includes his or her preferred doctors.

The survey asked 1,164 adults across the U.S., “In counties where there's only one Obamacare insurer left, should the uninsured penalty be waived for people without subsidies or whose preferred doctors are out-of-network?” Respondents had the option of answering either “No” or “Yes.” Answer options were displayed in randomized order across respondents.

Within counties that had only one insurer option, the majority of Americans surveyed supported the penalty waiver for the unsubsidized and those with doctor participation problems. 61 percent of adults surveyed answered “Yes” with respect to the penalty waiver. In comparison, the retention of the penalty in the aforementioned scenario only attracted support from 39 percent of respondents.

The survey’s focus on single-insurer counties comes at a time when health insurance research firm Avalere predicts that in 2017 over one-in-three markets for Affordable Care Act health plans will have only one insurance company choice.3 Avalere also noted that some regions may have no Affordable Care Act insurance options.4

As mentioned earlier in the report, one of the concerns associated with one-insurer counties is a lack of price competition. A 2015 government study found increased insurer competition on exchanges was associated with lower health insurance premiums. Premiums for benchmark health plans on exchanges were 9 percent lower in counties with three or more insurance companies compared with counties with one or two insurers. The same study also found lower annual rate increases on benchmark health plans in markets with increased insurer participation as compared to markets with no increase in insurer participation.5

Conclusion

In 2017, the combination of new market conditions for the Affordable Care Act combined with a new presidential administration may create an environment where politicians examine misalignments between health reform theory and actual consumer experience. If so, issues such as a penalty waiver in single insurer counties may have a chance to migrate from public preference to legal reality.

Methodology

Results are based on 1,164 responses to a nationwide survey conducted from August 22, 2016 to August 24, 2016. The survey asked respondents, "In counties where there's only one Obamacare insurer left, should the uninsured penalty be waived for people without subsidies or whose preferred doctors are out-of-network?" Respondents had the option of selecting “No” or “Yes.” The answer options were displayed in randomized order across respondents. The survey was displayed within a network of over 100 different news web sites and other content sites. Demographic inferencing and methodology to acquire survey respondents who approximate national statistics on age, gender, income, and region was performed by Google-administered technology. Race, education, and health insurance status were not examined. Margin of error across survey responses is estimated at +2.8/-2.8.

  1. Louise Radnofsky and Stephanie Armour. “States Start to Approve Steep Increases in Health Premiums.” Wall Street Journal. (August 24, 2016). http://www.wsj.com/articles/obama-administration-seeks-to-ease-concerns-over-health-insurance-spikes-1472061666. Last accessed August 26, 2016.
  2. Reed Abelson and Margot Sanger-Katz. “Obamacare Options? In Many Parts of Country, Only One Insurer Will Remain” New York Times. (August 19, 2016). http://www.nytimes.com/2016/08/20/upshot/obamacare-options-in-many-parts-of-country-only-one-insurer-will-remain.html. Last accessed August 26, 2016.
  3. “Markets” in this context refer to the rating regions for Affordable Care Act health plans offered on government exchanges. Dan Mendelson. “Experts Predict Sharp Decline in Competition across the ACA Exchanges” Avalere. (August 19, 2016). http://avalere.com/expertise/life-sciences/insights/experts-predict-sharp-decline-in-competition-across-the-aca-exchanges. Last accessed August 26, 2016.
  4. Ibid.
  5. Steven Sheingold, Nguyen Nguyen, and Andre Chappel. “COMPETITION AND CHOICE IN THE HEALTH INSURANCE MARKETPLACES, 2014-2015: IMPACT ON PREMIUMS.” Department of Health & Human Services. (July 27, 2015). https://aspe.hhs.gov/sites/default/files/pdf/108466/rpt_MarketplaceCompetition.pdf. Last accessed August 26, 2016.

AFFORDABLE CARE ACT TAX. Term health insurance is health insurance outside of the Affordable Care Act ("Obamacare"). It does not include all ten of the minimum essential benefits of Obamacare and it does not cover pre-existing conditions. To learn more about the tax, its exemptions, and how to calculate the affordability of term health with the tax, see here. To learn more about the differences between Term health insurance and Obamacare, see here.