Estimated number of health plans on federal exchange plummets by two-thirds

The Trump administration is estimating there are now only 700 issuers in the individual and small group markets, which is down from 2,400 in an earlier estimate.

The CMS cited the updated figure in an information collection notice posted Jan. 8. The agency is seeking permission from the White House's Office of Management and Budget to continue collecting data annually from exchange plans about their enrollees' risk profiles.

In an earlier version of the request submitted to the executive branch last month, the agency estimated there were 2,400 issuers in the individual and small group markets.

However, the agency is re-submitting the request to reflect the new number of plans it believes remain in the marketplace. It said the new estimate is based on data from HealthCare.gov and prior-year data submissions.

The new figure comes weeks after President Donald Trump signed a Republican-backed tax bill that repealed the individual mandate. Insurance companies stated repeatedly last year that not enforcing or eliminating the mandate would cause insurance companies to exit the federal and state exchanges.

However, experts said they doubted that the end of the mandate factored largely in the new estimate.

"The individual mandate doesn't end until 2019," said Tim Jost, an emeritus law professor at Washington and Lee University. "The huge drop in plans likely doesn't reflect a single year."

Others agreed that the new figure is likely based on plan defections from the marketplace over the last few years. "In some cases, these insurers just couldn't earn a profit when competing against plans with narrower networks and lower costs," said Larry Levitt, senior vice president at the Kaiser Family Foundation. "More recently, uncertainty over how the Trump administration would run the ACA marketplace has caused some insurers to exit."

Cheryl Fish-Parcham, director of access initiatives at the advocacy organization Families USA, said the new numbers serve as another reason to pass legislation and issue rulemakings that stabilize the individual market.

During the most recent open-enrollment period, the CMS estimated that over 1,500 counties in the U.S. had just one carrier to choose from.

"We need to make sure there is policy that is conducive to keeping carriers in the marketplace and making sure consumers have great choices," Fish-Parcham said.