Obamacare Fallout: BIG Insurance Companies avoid many State Exchanges resulting in fewer options

So few insurers offer plans on some of the new government health insurance exchanges that consumers in those states may pay too much or face large rate increases later, insurance experts say. 

An average of eight insurers compete for business in 36 states that had exchanges run or supported by the federal government last month, the Department of Health and Human Services says. (Idaho has since started its own exchange.) But just because an insurer sells in a state, it doesn't mean it sells in every area of a state so many residents have far fewer options.

Many state-run exchanges also have far fewer than HHS' average, which is weighted based on the number of uninsured residents in an area. Vermont has two, Kentucky has three and Nevada and Maryland each have four. 

Some insurers pulled out of the exchanges required by the Affordable Care Act as the Oct. 1 launch approached. That leaves an uneven patchwork of providers — ranging from one insurer in New Hampshire and West Virginia to 16 in New York. 

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States with just a few providers "definitely lose the competitive effect of carriers competing against each other to drive down those costs," agrees David Cusano, also a senior research fellow at the Georgetown University Health Policy Institute. 

Corlette says insurers' decision are motivated by profits. 

"Serving the public is not part of their mission. … They're crunching the numbers and looking at tightening profit margins," she says. "Part of that is a result of the Affordable Care Act, basically telling these insurance companies that your insurance model to attract healthy people and keep out sick people is no longer allowed."...

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