Dr Michael E. Chernew: ACA Exchanges Are Far From Failure, but Success Not Guaranteed

Large insurers reducing their involvement in the Affordable Care Act health insurance exchanges doesn't necessarily indicate failure, but success is not guaranteed, said Michael E. Chernew, PhD, the Leonard D. Schaeffer Professor of Health Care Policy and director of the Healthcare Markets and Regulation Lab at Harvard Medical School, as well as co-editor-in-chief of The American Journal of Managed Care.

Transcript (slightly modified)

What is your opinion on the sustainability of the Affordable Care Act with large insurers pulling back on their involvement in the exchanges?

I think it's too early to tell how well the exchanges will stabilize. It's certainly concerning when insurers pull out. But other insurers are expanding. There are some markets that probably have too few carriers to maintain real competition, many of those are rural markets. But there are others—many urban markets you still have vigorous competition on the exchanges.

So insurers, largely, would not be expected to participate on the exchanges that they were losing money, and many of the larger insurers were. So they've opted not to participate. It remains to be seen in the future if they get back in, if the market stabilizes, if there are enough competitors. Right now, we're far from failure, but success isn't guaranteed.

What is the importance of new insurers entering the ACA exchanges as insurers like Aetna and UnitedHealth Group reduce their involvement?

It varies by market, in general. You don't want to have too many carriers, because it makes choice very hard. On the other hand, there are some markets that have too few. So there are selected places—my understanding is that North Carolina and other places—where it would be important to have more competitive insurers potentially as some of the insurers pull out. Others, it's less important.