Vickie Sheehan is one of the lucky ones.
She gained health insurance in 2013 through the Affordable Care Act, buying coverage on the health exchange. Since then, Sheehan has undergone treatment for anal cancer.
“Everyone complained about Obamacare… to me, it saved my life,” Sheehan said.
She still feels that way. But this year, for the first time since the ACA, or Obamacare, was implemented, there are fewer choices for Sheehan and the more than 82,000 Kentuckians who get their insurance on the exchange. Fewer companies are selling insurance to these customers, and the lack of options means higher prices and fewer benefits.
In Kentucky, most people get health insurance through government programs — like Medicaid or Medicare — or through their employers. But since the ACA created health exchanges, everyone else in Kentucky has been able to get coverage on the marketplace. In Kentucky, until recently, that marketplace was called Kynect.
But Kentuckians buying coverage for 2017 on the exchange can't get coverage from Aetna, United Healthcare, Cigna or the Kentucky Health Cooperative. Insurance on health exchanges is just one of the products these companies offer.
But while other products — like Medicaid or Medicare — are making money, the exchanges are losing money.
Why?
There are two main reasons, and both are illustrated by 63-year-old Sheehan.
1. There are lots of unhealthy people buying insurance through exchanges and not enough healthy people to balance them out.
Sheehan has been buying her insurance on the exchange for the past three years. Since then, she’s racked up big hospital bills: radiation, chemotherapy and surgery for anal cancer. Her insurance has paid those bills. Now, Sheehan's anal cancer is gone, but doctors have also found spots on her liver that she’ll have to get checked out every three months. Insurance will pay for those tests, too.
“The tests I have to have are expensive, and without insurance, and good insurance that’s going to be pay… I don’t know what people do that can’t afford insurance,” Sheehan said.
This is one of the big issues with the viability of the health exchanges. Anyone can get coverage, because insurance companies aren’t allowed to exclude people with pre-existing conditions. And if the penalties aren’t high enough to convince young healthy people to buy into the system, too, it’s unbalanced.
There are too many people like Sheehan, and not enough healthy people to balance out her expenses.
“It’s in the interest of young people to avoid expensive insurance plans because they’re paying more than they’d get back in services,” said Norman Daniels, professor of ethics and population health at the Harvard School of Public Health. “I think that’s what happened that forced a lot of insurers out of market.”
2. Insurers end up paying a lot more for care for people who have insurance through exchanges, which eats away at profits.
So, Sheehan’s insurance company has spent a lot of money on her care. But even where insurers are pulling out of health insurance exchanges, they’re still offering insurance to the elderly, poor and disabled through Medicaid and Medicare programs.
Typically, people in these programs need a lot of care for chronic health conditions, too. And yet, insurers are making money.
And that’s because depending on where you get your insurance, your doctor is paid differently. Employer-based insurance typically pays doctors the most. Medicaid typically pays doctors the least.
So, while Sheehan might be getting the same care as someone with Medicaid, her care costs more for her insurance company than if she were on Medicaid. That’s according to Burke Christensen, insurance professor at Eastern Kentucky University. While Medicaid might pay $300 for a procedure that the hospital bills $1,000 for, the exchange insurance plan would pay $800 for that same procedure.
“It costs more to insure those same folks than it does Medicare or Medicaid,” Christensen said.
The insurers remaining on the exchange are trying to keep costs down in a new way: by limiting the doctors their customers can use.
That's what's happening to Sheehan, who has insurance through Humana. Humana is only offering insurance on the exchange in one Kentucky county -- Jefferson County -- and Sheehan's plan now only offers a limited network of doctors and no out-of-network benefits. People in other Kentucky counties can get insurance through the exchange from CareSource or Anthem; both of those companies now offer only "health maintenance organization," or HMO, networks in most places.
Ben Sommers, assistant professor of health policy and economics at Harvard University, said the goal is to keep costs down.
“(These plans) tend to focus on keeping costs down, not giving people access to most top academic medical centers but focusing on giving people the services they want,” Sommers said. “And that seems to be more effective.”
But for Sheehan, even though her doctor selection is limited and her deductible has gone up, any insurance is preferable to none. Now that the future of these exchanges is in flux – President-elect Donald Trump has vowed to repeal and replace the Affordable Care Act, which would include exchanges – Sheehan is worried about what will happen to people like her.
“I think (Trump) realized what the care means to people," Sheehan said. "He says he is going to revamp it, and not get rid of it, and I hope he sticks to his word. I’m skeptical, scared. I just hope he sticks by his word."
For Kentuckians who already have coverage through the state health exchange, open enrollment for a policy that begins January 1 runs until the end of this month. For those purchasing coverage for the first time, the deadline was December 19.
