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Virginia is for lovers (of Obamacare bald spots)

Pacific Press / Getty Images

Virginia has, suddenly and unexpectedly, become the Affordable Care Act's biggest trouble spot.

The state has 48 counties and 15 cities with zero health plans signed up to sell health coverage on the Obamacare marketplace in 2018. About 73,000 Obamacare enrollees live in these areas, which are concentrated in the western and northern areas of the state. This works out to about 17 percent of Virginia's health law enrollees staring down a situation in which they may not have any options on the marketplace next year.

Robert Wood Johnson Foundation

These areas of Virginia lost their one remaining insurance plan last week, when Optima Health announced it would scale back its presence on the insurance marketplace.

This leaves the state in a somewhat precarious situation. Obamacare's open enrollment begins in just 50 days, on November 1. This leaves about a month and a half for insurance regulators to recruit another health plan to fill this bare spot. If that doesn't happen, you'd have 70,000 or so people who receive tax credits to purchase coverage on the marketplace — but have no options on the marketplace to choose from.

Will Virginia's problem get fixed? Right now, it feels like a toss-up to me. I can foresee a situation where another plan comes in to save the day — and one where this becomes a true trouble spot in the Affordable Care Act's marketplace.

How Virginia's empty-county problem could get fixed: Virginia is not the first state to find itself with some bald spots. Missouri, Ohio, and Nevada all stared down the exact same problem earlier this year — and got it fixed.

Here's why: Subsidized monopoly markets are attractive to health insurance plans. The Affordable Care Act provides generous tax credits to purchase health insurance, which shields the vast majority of Obamacare enrollees from big premium increases. A health plan could come into Virginia, set decently high premiums, and still retain most of the Obamacare enrollees in the area. They're buying with tax credits that limit the percentage of income they pay on premiums.

We've seen this to be an attractive proposition to health plans in the past. Centene, for example, has swooped into Obamacare's bald spots elsewhere. It is an insurer that has actually done decently well, business-wise, in Obamacare and has been looking to expand its footprint.

Virginia Health and Human Services Secretary Bill Hazel says that the state is in discussions with the remaining insurance plans on the marketplace about how to cover the area — and has had inquires from health plans outside the state too.

"Some of the plans are trying to figure out how they can get back into the bare counties," Hazel says. "We know there are other plans that are interested, too."

How Virginia's empty-county problem could stick around: Virginia's biggest enemy right now is time. There are only 50 days left until open enrollment, and insurance plans might not have the bandwidth to take on a new insurance market with such little notice.

This tight timeline comes into play when thinking about some health plans that might want to jump into the Virginia marketplace but haven't laid the groundwork to do so. "The challenge is that rates are due Monday of next week," Hazel says. "You need to find plans that are already licensed in the state and can do the actuarial work to stay in."

Instead, there are changes happening at the federal level that might make insurance plans less likely to jump into a new market. The Trump administration has announced it will cut Obamacare advertising by 90 percent next year, and has let the in-person outreach budget lapse entirely.

Experts generally expect these cuts will lead to fewer healthy people signing up for coverage (read more about why here). This makes the Obamacare marketplaces a less appealing climate for health insurers, which don't want to end up with a plan full of the sickest enrollees.

Hazel argues that what is really needed to bring a health plan back into Virginia's empty counties is a stabilization package from Congress that includes guaranteed funding of the cost-sharing reduction subsidies for next year. The state doesn't have the budget to step in with those funds, and he worries that without them, the marketplace just isn't an attractive proposition to health plans that might consider a last-minute entrance.

"Congress is going to have to fix this," Hazel says. "How much confidence we have in this problem getting fixed is really a question about how confident we are in Congress's ability to pass something."

Charts of the Day

Kaiser Family Foundation

As we wait for Bernie Sanders's health care plan — expected on Wednesday afternoon — I wanted to share one of my favorite charts on single-payer coverage. It shows that public opinion tilts in favor of a government-run health plan, but that those views are easily changed with additional information. The chart shows the arguments that increase support for single-payer. And the one below shows the arguments that lower support:

The takeaway for me is this: Opinion about single-payer is quite malleable. It can go up or down depending on how the concept is described. Read the full KFF document here.

Kliff’s Notes

With research help from Caitlin Davis

Today's top news

  • “Merkley announces he will co-sponsor 'Medicare-for-all' bill”: “Sen. Jeff Merkley (D-Ore.) on Monday announced he would co-sponsor the 'Medicare-for-all' bill being introduced by Sen. Bernie Sanders (I-Vt.). 'Health care should be a right for every single American, not a privilege reserved for the healthy and the wealthy,' Merkley said in a statement.” —Rebecca Savransky, the Hill
  • “Cory Booker backs single-payer”: “Add Sen. Cory Booker to the list of prominent Democrats endorsing a single-payer health care system. Booker said in a television interview Monday that he would cosponsor Sen. Bernie Sanders's single-payer bill — which Sens. Kamala Harris and Elizabeth Warren have also endorsed. “ —Sam Baker, Axios

Analysis and longer reads

  • “Left in the lurch: Ongoing uncertainty is taking a toll on health insurers”: “Even though Congress shifted its focus from bulldozing the Affordable Care Act to stabilizing the troubled individual market in the short term, big questions remain, particularly around future funding for cost-sharing reduction subsidies that insurers say are crucial to steadying that business line.” —Mara Lee and Shelby Livingston, Modern Healthcare
  • “Five bipartisan steps toward stabilizing our health-care system”: “We recently gathered a group of Democrats and Republicans at the Bipartisan Policy Center — both advocates and critics of the Affordable Care Act — to develop a set of concrete recommendations to address the cost of insurance premiums. We developed five recommendations that could stabilize the individual health insurance market.” —Bill Frist and Andy Slavitt, Washington Post
  • “High Deductibles Aren't Just an Obamacare Phenomenon”: “The push toward high deductible health plans has hit nearly 25 million American workers as cost-shifting at U.S. employers escalates, according to a new analysis funded by the Robert Wood Johnson Foundation. On average, deductibles rose 10% in 2016 to $1,696 for ‘single plans’ with such costs expected to continue to increase in coming years, benefits analysts say.” —Bruce Japsen, Forbes

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