A number of big insurance companies say they aren’t making enough money from Obamacare.

As a result, many are merging with competitors or leaving the Affordable Care Act’s health exchanges altogether.

That’s bad news for consumers, and for a couple of reasons. One is it leaves them with fewer options when they shop for health plans. A second is it reduces competition, which often increases rates for policyholders.  

Of the top five health insurance providers in the US, three are merging. Another is reducing its business in rural counties, which usually are the country’s least profitable.

Keep reading to learn which insurance companies are merging, which are leaving the ACA’s health exchanges, and why they’re making these changes.

Major Mergers

Anthem

This large health insurer is acquiring a smaller one, Cigna, as we speak. For $54 billion, in fact. Word on the street is it was prompted by falling profits.

The acquisition may well boost Anthem’s bottom line. Its impact on consumers is likely to be far less positive. After all, it’s expected to cut competition in the markets the health insurer currently serves. Less competition in this area often leads to higher premiums for policyholders.

Aetna

Another top health insurance company, Aetna, also is acquiring a competitor. In this case, the partner is Humana, and this merger’s reported cost is $37 billion. This comes just after Humana decided to pull out of several states’ exchanges.

Unlike the Anthem merger, this one is expected to create less competition in some areas and more in others.

Regarding that first point, Aetna has said it’s looking to expand into new states. It’s also said it wants to expand its presence in urban centers rather than rural areas, due to the increased potential for profit.

Premera Blue Cross

Washington-based Premera Blue Cross recently revealed it will pull out of over a dozen of that state’s rural counties. It plans to leave Oregon too.

Both changes have the potential to alter the dynamic of local and regional health insurance markets in major ways.

Leaving Exchanges Entirely

UnitedHealthcare

Do you live in a more rural part of the US and rely on Obamacare’s health exchanges for insurance coverage? Pay attention. Insurers are dropping coverage in such areas left and right to save money.

UnitedHealthcare is a good example. The company recently indicated it will leave a number of rural marketplaces by the start of 2017.

Which ones? The Kaiser Family Foundation expects Alabama, Arizona, Florida, Kansas, Mississippi, Oklahoma, and Tennessee to be the most affected. Over half the counties—650, in total--in those states will have just one health insurance provider to choose from after UnitedHealthcare exits.

Why This is Happening and What it Means

As for why so many insurance companies are giving up on rural areas: they tend to be the least profitable. That’s largely because people there file more claims per capita than people in more urban locations.

In other words, leaving these regions could increase the revenue for UnitedHealthcare and the other providers mentioned here.

For consumers, these changes are far less positive. Fewer insurance options mean fewer healthcare options as well. Once these mergers and market withdrawals have been completed, some people will be forced to find new doctors. Others may have to pay for prescription drugs themselves.

To make matters worse, analysts predict insurance premiums will spike after these mergers and withdrawals are finished. This is because greater competition usually produces lower premiums, while less competition prompts higher premiums. And there’s little doubt UnitedHealthcare’s above-mentioned move will cause competition to drop off a cliff in certain markets.

This is the opposite of one of the Affordable Care Act’s original goals—to increase competition in the healthcare space.

Criticism

As you probably can imagine, all of this activity has prompted a fair amount of debate.

One concern that’s often voiced is the largest insurers will monopolize the industry after their mergers are complete.  

As companies like UnitedHealthcare step away from the marketplace, especially in rural areas, they leave consumers with fewer health insurance options. And as has already been said, that decrease in competition often means an increase in premiums.

Should you live in a state these mergers and market withdrawals are expected to impact, review your health plan now. Make sure you’ll still get the coverage you need after it’s all said and done. If you don’t think this will be the case, look for other options.

Just remember that if you used a health exchange to buy your current plan, you can only make changes to it during an open enrollment period. The next one begins on Nov. 1 of this year and ends on Jan. 31, 2017.