By Anna Wilde Mathews
Health insurers appeared likely to offer Affordable Care Act
plans in all U.S. counties next year, despite months of drama and
worries among some state officials about last-minute exits, ahead
of a late-Wednesday deadline.
Some major insurers that had signaled that they might pull back,
including Cigna Corp., Health Care Service Corp., Molina Healthcare
Inc., Highmark Health and Independence Blue Cross, this week said
they would stick to the states and regions where they had filed to
offer ACA coverage.
The final decisions of some insurers, including Centene Corp.,
hadn't been disclosed as of Wednesday evening, and there was still
a risk that companies might make 11th-hour pullbacks.
Wednesday's deadline to sign federal agreements to offer ACA
plans marked the end of a monthslong drama in many states. Insurers
have repeatedly announced they would depart exchanges, and at
various times as many as 145 counties, in states including Nevada,
Ohio and Missouri, have appeared at risk of lacking a marketplace
insurer for next year, according to the Kaiser Family Foundation.
State officials scrambled to find replacements, and in many cases
had to approve large rate increases for some insurers to stay.
Cigna earlier confirmed it would withdraw from Maryland's
exchange, but on Wednesday said it would definitely continue
offering ACA coverage in a half-dozen other states.
Molina will leave the exchanges in Utah and Wisconsin, as
previously announced, but on Tuesday said it would remain in seven
other states where it sells ACA plans.
Centene, which has said it plans to expand its role in the
exchanges next year, didn't respond Wednesday to requests for
comment about its final marketplace decisions. Centene is an
increasingly important player in a number of states' exchanges, and
in some regions it is the only insurer planning to offer ACA
coverage in 2018.
The number of insurers in many regions is expected to be thin.
Roughly 50% of counties appeared likely to have just one exchange
insurer next year, and 30% were projected to have two, according to
a tally by the Robert Wood Johnson Foundation, though those totals
could change if other insurers disclose withdrawals.
To woo and keep insurers, state officials spent months
negotiating, and in many cases they are approving substantial rate
increases for next year that include extra boosts to insulate
insurers from uncertainty about how the law will be
administered.
For instance, Mississippi's one exchange insurer was set to get
a rate increase of a 47.4% on average, according to the state's
insurance commissioner. In Kentucky, Anthem Inc.'s rates will go up
41.2% and nonprofit CareSource's rates will rise by 56%.
Officials in Pennsylvania and New Jersey, where Independence
Blue Cross offers ACA plans, "have been very, very helpful and
understanding around rate setting," said Daniel J. Hilferty, the
insurer's chief executive. "We feel very good about the partnership
we have with those two states."
The biggest issue for insurers is federal payments that
reimburse companies for reducing the health-care costs of
low-income ACA enrollees, which the Trump administration has
threatened to halt. The potential loss of those payments was
expected to add about 20% on average to the cost of middle-tier ACA
silver plans, according to an analysis by the Congressional Budget
Office.
Insurers have also sought increases tied to the concern that the
health law's coverage mandate, which is supposed to prod healthy
people to enroll in coverage, will be weakly enforced or seen as
toothless by consumers.
Insurers say that the rate increases, along with other factors
like the perception of a weakened coverage mandate, carry a serious
risk: There could be a drop in the number of enrollees,
particularly the healthy ones whom insurers need to avoid a
continuing cycle of rate increases. People whose incomes are too
high to get federal premium subsidies may drop coverage or opt for
cheaper, skinnier policies.
"You need the healthy individuals to balance out your risk
profile," said Pamela Morris, chief executive of CareSource, which
will offer exchange plans in four states next year. "That's always
a huge concern."
Insurers are also worried about the impact of the Trump
administration's announced cuts in funding for advertising and
grants for groups that help people sign up for coverage. This
year's open-enrollment period, which starts Nov. 1, is shorter than
in past years, and the Trump administration also has said that the
federal exchange, HealthCare.gov, could be shut down during chunks
of that time for maintenance.
The Department of Health and Human Services said in a statement,
"Insurers have been fleeing Obamacare's individual market, leaving
nearly half of our nation's counties with only one coverage option.
Americans are once again facing skyrocketing costs and plummeting
choices because of Obamacare's fundamental failures."
In deciding to remain in the exchanges, the insurers are keeping
their hands in what some still hope will become a sustainable,
profitable business. A Kaiser Family Foundation analysis found
insurers' financial results on exchange plans improved in the first
quarter of this year, a sign of potentially emerging stability.
Alexis Miller, a Highmark senior vice president, said the
company is projecting it will roughly break even on its exchange
business next year, with rate increases that "mitigated to a good
degree the risk that we believe to be the greatest." Sticking with
the exchanges helps Highmark's relations with its customers and the
states where it does business, she said, and gives it a voice as
future changes are debated.
"We think we are better off participating, and staying in the
game and shaping what comes next," she said.
Next year will see a continued shift in which types of insurers
are in the exchanges. The largest national players, such as
UnitedHealth Group Inc., Aetna Inc., and Humana Inc., by next year
will have almost completely abandoned the marketplaces.
Another major national insurer, Anthem, said Wednesday that it
would leave Maine's exchange next year, a possibility it had warned
of earlier. Including Maine, Anthem has said it would exit
exchanges in five states and pull back in an additional five.
Anthem offered exchange plans in 14 states this year.
Filling the breach in some states that have seen insurers exit
are Medicaid-focused insurers such as CareSource, Molina and
Centene. Blue Cross Blue Shield insurers, most of which are
nonprofits, remain the backbone of many marketplaces.
Write to Anna Wilde Mathews at anna.mathews@wsj.com
(END) Dow Jones Newswires
September 27, 2017 19:39 ET (23:39 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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