Oscar Health Insurance just announced plans to withdraw from the Affordable Care Act marketplace in New Jersey next year. The company joins UnitedHealthcare, also exiting the marketplace in 2017. Aetna, meanwhile, has scrapped plans to provide coverage here next year.

Are the exits a sign the ACA is failing? And what can we do to make sure a vibrant and competitive market remains in New Jersey?

First I think it’s important to remember what New Jersey had in place before the ACA. We were ahead in many ways, such as having laws that prevented insurers from discriminating based on a person’s health history and allowing unmarried dependents to stay on their parents’ health insurance until the age of 31.

Back in 2013, before the ACA marketplace started, we had only about 147,000 people covered through our individual market. Most people signed up for the “basic & essential plan,” which provided somewhat minimal benefits but protected members in the case of an emergency.  We had six plans, though two companies had the lions’ share of the market. With no subsidies, premiums were high.

It was a market in a slow death spiral.

Yet once the ACA marketplace plans started in 2014, total enrollment for both the ACA marketplace and the state-run individual market (this is where people could buy plans without a subsidy directly from insurers) peaked this year at about 359,000 covered lives. The reason? The subsidies. Over 80% of those in the ACA marketplace in New Jersey receive a subsidy. The average subsidy in 2016 is $291 per month.  Original estimates projected that about 570,000 people would gain coverage through the ACA marketplace and state-run individual market.  So we are still below the goal by 210,000 lives.

Today we are learning that subsidies alone will not insure the vibrant and competitive marketplace we need. Having worked in the insurance industry, I have seen, first hand, how competition drives companies to work more cooperatively with health care providers. Competition drives insurers to be good corporate citizens responsive to both regulators and consumers. Competition pushes companies to find ways to reduce their administrative costs and keep premiums as low as possible while also delivering the service and health care choices their members want.

How can we keep healthy competition alive?

The problem is not unique to New Jersey and insurers are pulling out in other states as well. The Obama administration just announced some standards to strengthen the marketplace for 2018 that make sense. They are changing some of the risk adjustment strategies, extending the reinsurance program, and also planning intensive outreach to consumers who still haven’t signed up, especially younger people and Latinos. You can read more here.

Insurers leaving the market cite the rising costs of health care as well as the poorer than expected risk pool. No insurer can survive by insuring mostly high-risk people. We need more young and healthy people to join up. The federal government is seeking to increase enrollment by working with the Internal Revenue Service to contact people who paid a penalty for not having coverage. The government would reach out to these people with information about how to enroll.

We also need to explore other ways to maintain a healthy ACA marketplace. We need an on-going conversation with all stakeholders. Looking back at 2013 shows us that we cannot turn back the clock.  For anyone in need of health insurance things today are so much better. The ACA is more than just the marketplace and includes significant changes such as the expansion of Medicaid.

We need to keep things moving forward.

What follows is a starting point of ideas in the forefront of this critical discussion. Some are controversial and I do not necessarily agree with each proposal here. But I believe the situation is concerning enough to put all ideas on the table. I am eager to hear your thoughts as well.

• Stronger enforcement of individual mandate. When the penalty is less than the premiums — and the exceptions to the penalty are so broad — it is no surprise that people don’t sign up.
• Provide fewer exceptions to enrollment outside of open enrollment period. This should reduce adverse selection and add predictability to the medical costs.
• More outreach and education about health insurance and how to enroll. Insurance is complex and we need to provide more outreach, education and tools to explain its benefits for each individual’s situation.
• Regulatory oversight of high cost – low value medicine. Tackling out-of-network and surprise billing issues as well as the instances of abusive increases in the cost of drugs (see the $600 EpiPen) is key to reining in growing medical costs.
• Ban marketing of the Emergency Departments for non-emergency medicine.  The focus should be on community-based, not hospital-based, care for primary care that should be addressed in lower cost settings.
• Increase subsidies: While this doesn’t reduce the cost of health care, it may be needed to get more people into the marketplace and create a healthy risk pool in the short term.
• Improve the enrollment process on marketplace.org and improve tools for consumers to pick the right plan for their health needs and budget. Improving the purchasing process and plan satisfaction level along with getting people in the right plan could decrease drop off and increase enrollment, especially among younger healthy people. This includes making sure that network directory and benefits information is accurate and easily searchable across all plans during the plan selection process.