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How do you fix Obamacare’s bald spots?

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About two months out from open enrollment, there are 17 counties with zero plans signed up to sell Obamacare coverage.

There are also about half a dozen ideas for how to fix this problem — all of which could come up in the bipartisan Senate health care hearings that we're expecting in early September.

But before we get to possible political solutions, let's dive into the actual problem. Right now about 10,000 Obamacare enrollees live in areas of the country where no health plans have signed up to sell coverage on the marketplaces.

This is, relatively speaking, a small sliver of the Obamacare marketplace, which has about 10 million enrollees. We're talking about 0.001 percent of those who purchase coverage living in these empty-shelf areas.

That being said, for the 10,000 enrollees in those Obamacare areas, this is a huge deal. Right now about 85 percent of health law enrollees use subsidies from the government to purchase coverage. Those subsidies can only be used through the health law marketplace. No options on the marketplace means nowhere to take the financial help from the government. It'd be like turning up to use a coupon at the grocery store, only to find the shelves are bare.

Republicans and Democrats both agree that this is a problem, that all Obamacare enrollees should have somewhere to take their subsidies. Senators on both sides of the aisle have kicked around the idea of letting backup health plans accept those payments — but they differ significantly in which type of insurers they pick.

Many health policy experts have kicked around the idea of letting Obamacare enrollees sign up for other government-run health plans should they live in empty area. Yale's Jacob Hacker recently wrote a piece for Health Affairs suggesting that the government add Medicare into the national Obamacare marketplaces.

"It would provide competition in counties with only one or two insurers," Hacker writes with his co-authors, Gerald Anderson and Paul Starr. "And it would ensure that all counties would always have at least one insurance option available."

This idea is pretty similar to the public option that was proposed by liberal senators back during the original health care debate, where the government would run a plan that could compete with others on the marketplace. Instead of standing up a new plan, given that open enrollment starts in about two months, Anderson, Hacker, and Starr propose letting Medicare (a plan that already covers 50 million enrollees) join up.

Another idea put forward by health policy expert Timothy Jost would allow the Federal Employees Health Benefits Plan (FEHBP), which covers tens of thousands of government workers, enter only the marketplaces that are left empty.

Government workers live all across the country. So the FEHBP would be a good option, Jost argues, because "FEHBP carriers are available throughout the country with reasonable provider networks, so choice should be available in bare areas." Unlike Medicare, it is more tailored to a working-age population, like those who purchase Obamacare.

These plans likely appeal to Democrats, who would be quite keen on having a government plan participate in the marketplaces. The second one, from Jost, has some bipartisan appeal too — a group of top Democrat and Republican health care advisers cited it as a possible option in their recent plan to fix the health care law.

But there is also a competing, conservative idea floating around Capitol Hill. Back in February, when the area surrounding Knoxville, Tennessee, had zero plans signed up to sell coverage, the state's two Republican senators proposed letting those in the empty area use their Obamacare tax credits to buy plans that don't comply with the Obamacare mandates.

This would mean that Obamacare enrollees could buy plans that don't, for example, cover the essential health benefits but instead include a skimpier set of medical services. This plan, from Tennessee Republican Sens. Lamar Alexander and Bob Corker, was also meant to give Obamacare enrollees at least some option if Obamacare insurance plans didn't want to come into a specific area.

But this option worried consumer advocates. They thought it would encourage the proliferation of skinny health plans, essentially undermining the health law's requirements. It's true that Obamacare enrollees would be able to sign up for a plan — but it's also true that the plan might not cover the benefits they rely on, or offer sick people the same prices as healthy ones.

It's notable, though, that this plan is offered by Alexander, who chairs the Senate committee that will hold the bipartisan hearings in September. This is certainly an idea he's thought about, and one he'll bring to the discussion — but it's also not the only option on the table.

The debate about what plans ought to be allowed into the empty Obamacare counties is, in a way, the larger Obamacare debate in miniature. Should the individual market have plans with heavy government regulation and robust benefit packages, or should skimpier plans be allowed to enter (and likely edge out those robust ones)? Even when senators agree that something should be allowed into these empty markets — that those people need a backup plan — the hard part is nailing down the specifics of what that plan ought to look like.

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Kliff’s Notes

With research help from Caitlin Davis

Today's top news

Analysis and longer reads

  • “Doctor Shortage Under Obamacare? It Didn’t Happen”: “Studies published just before the 2014 coverage expansion predicted a demand for millions more annual primary care appointments, requiring thousands of new primary care providers just to keep up. But a more recent study suggests primary care appointment availability may not have suffered as much as expected.” —Austin Frakt, New York Times
  • “A stronger Medicaid emerges from GOP health overhaul debate”: “Medicaid, a 1960s Great Society pillar long reviled by conservatives, seems to have emerged even stronger after the Republican failure to pass health overhaul legislation.” —Ricardo Alonso-Zaldivar, Associated Press
  • “Climbing Cost Of Decades-Old Drugs Threatens To Break Medicaid Bank”: “Drugs driving Medicaid spending increases ranged from common asthma medicines like Ventolin to over-the-counter painkillers like the generic form of Aleve to generic antidepressants and heartburn medicines.” —Sydney Lupkin, Kaiser Health News

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