In Alabama, not a whole lot of love for Obamacare

• Market dynamics mean pain for consumers in states like Ala.%2C Ark. N.C. and N.H.
• In Alabama%2C BlueCross%2C the dominant insurer%2C blames the Affordable Care Act
• Many who see rates climbing won%27t qualify for a subsidy%2C either

MONTGOMERY, Ala. — The letters landed in early October, canceling health plans for thousands of BlueCross BlueShield of Alabama members and offering to enroll them in new coverage often at substantially higher cost.

"I thought my plan might go up like $30. I didn't know it was going to (nearly) double" to $478 a month, said Merry Hardy, who is self-employed and lives in Alexander City, in the middle of the state.

BlueCross, like Hardy, blames the Affordable Care Act, which it says disallows current, less expensive insurance for about 80,000 of its Alabama customers starting next year.

But others see insurance market dynamics as a big part of the problem. Because it covers about 90% of the Alabama individual market, BlueCross faces little competition and few reasons to lower prices, critics say.

In the Huntsville area, where only BlueCross and Humana offer plans through the federal government's online exchange, the least expensive, medium-level "silver" policy for a 50-year-old costs $352 a month. A hundred miles north in Nashville, where four insurers compete, the least expensive silver policy costs $253, or 28% less. These prices don't take into account the federal tax credit subsidy many buyers will receive.

People in other states face similar situations. Single companies dominate individual insurance in New Hampshire, Arkansas, North Carolina and elsewhere, leaving limited options in the online marketplaces.

An analysis of the three dozen states relying on the federal marketplace shows that, on average, the least expensive silver plan costs 34% more in regions with one or two insurers selling through the marketplace than in regions with at least eight insurers.

Aside from ads urging people to enroll in new plans, BlueCross, an independent non-profit, is saying little except that existing plans won't comply with the law in 2014 and that new requirements such as accepting consumers with medical problems are affecting premiums. CEO Terry Kellogg declined to grant an interview.

An online calculator showed Robin Cotton, a Democrat and real estate agent who lives outside Huntsville, that her family's premium for a medium-level silver policy, with a subsidy, would slightly decline next year to $282, she said.

Consumers with incomes of up to about $46,000 for individuals and $94,000 for a family of four get tax credits to help cover the premiums.

Insurers may offer several types of plans under the health law ranging from a bronze policy, which pays 60% of an average patient's costs for essential benefits, to platinum, which covers 90% of average costs.

With an income of about $76,000 for a household of two, Beth Biggs, 49, a non-profit executive in Montgomery who describes herself as a political independent, said she won't qualify for subsidies.

Under the replacement silver plan offered by BlueCross, her monthly premium would rise 38% to $345 and her deductible would increase from $750 to $2,000. She's not especially mollified by the health law requirement that plans cover essential benefits, eliminate caps on claims and limit annual out-of-pocket costs.

"Those of us who were hoping this was going to be a good thing are now realizing we're … going to be hurting so many middle-class families," she said.

Hardy, 56, a single Republican who runs a storm-shelter installation business, said she won't qualify for subsidies, either. Her monthly cost would rise 77% to $478, and her deductible would increase by a third, to $2,000. She plans to look for a non-BlueCross plan.

That may be difficult. BlueCross is the only carrier selling coverage statewide through the exchange. Other carriers hold tiny pieces of the individual coverage market and often offer smaller networks of doctors and hospitals.

"Nothing changed in Alabama" after health law provisions kicked in, said Chad Gay, an insurance broker based near Birmingham. "In 2013, you've got Blue Cross, United and Humana. In 2014, you've got Humana, Blue Cross — and outside the exchange — United. Same players, higher rates. Great."

KHN reporter Jordan Rau contributed.

Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a non-profit, non-partisan health policy research and communication organization not affiliated with Kaiser Permanente.