Uncertainty over federal cost-sharing subsidies prompted the insurer to exit 18 counties.
Citing a possible defunding of federal cost-sharing subsidies for low-income Affordable Care Act (ACA) enrollees, health insurer Anthem plans to exit the exchange marketplace in 18 Ohio counties as of January 1, 2018. The move will leave 10,500 residents without a health insurance provider next year, Reuters reports.
Anthem had previously indicated its support of the GOP’s healthcare reform bill, the American Health Care Act (AHCA), and encouraged lawmakers to clarify the marketplace so the insurer could finalize its rates for next year. In a letter to the House Ways and Means and Energy and Commerce Committees in March, Anthem President and CEO Joseph Swedish wrote “without significant regulatory reform,” the company would be forced to reconsider its participation in the individual marketplace in as many as 14 states.
But with healthcare reform still in flux (the AHCA is currently waiting for a Senate vote) and the fate of the cost-sharing subsidies undecided, Anthem had to elect whether or not to continue in some states at the same time it was calculating rates for 2018. “An increasing lack of overall predictability simply does not provide a sustainable path forward,” Anthem Spokesman Jeff Blunt said in a statement to the Cincinnati Enquirer.
While Ohio Gov. John Kasich has expressed reservations about the AHCA’s provision ending Medicaid expansion, he and others in his administration have advocated for less regulation to bring down healthcare costs. “The best, long-term fix is to repeal the ACA and replace it with better regulations,” the Ohio Insurance Department said in statement.
Meanwhile, President Trump has sent mixed signals on the future of cost-sharing subsidies. At one point, he indicated a willingness to defund the subsidies in order to pull Democrats into negotiations over a new healthcare bill. However, his budget proposal included a boost for those subsidies (under the premise that the ACA remains in effect).
Higher Premiums on Tap
Anthem’s exit from most of the Ohio ACA marketplaces falls in line with other high-profile departures in other states. Aetna, Coventry, and Consumer’s Choice have all left the ACA exchanges in South Carolina, leaving residents with one option: Blue Cross Blue Shield of South Carolina.
Alaska, Wyoming, Oklahoma, and Alabama operate exchanges with only one insurer, and many Iowans will have a single provider next year. Research from healthcare consultant Avalere and the AP found only one insurer in 40% of U.S. counties will administer plans on ACA exchanges next year. In some counties, there will be no exchange options. Humana’s planned exit from Tennessee means residents in 16 counties will lack any choice in 2018.
Even those insurers who remain on the exchanges are projecting higher premiums. As rate filings trickle in, Reuters reports insurance departments nationwide have seen increases climbing 50% to 60% or more for 2018.
A Bellwether for Other States?
The Washington Post reported that Anthem intends to remain on the exchanges in other states, including Virginia and Connecticut. In Ohio, Blunt told the Cincinnati Enquirer that Anthem will continue to offer health insurance packages to employers in the state and administer its policies for residents who purchased coverage prior to 2013. In one Ohio County — Pike — Anthem plans to maintain and sell its non-exchange-based contracts.
Yet Anthem’s withdrawal from Ohio is significant because the state reportedly had one of the more robust exchange marketplaces in the United States. Nevertheless, participating insurers fell from 17 in 2016 to a still healthy 11 this year. But the Ohio Department of Insurance told the Wall Street Journal that 20 counties had only one insurer.
Persistent losses on the ACA exchanges have prompted some major insurers, like Humana, to exit the program. Coupled with continued uncertainty over healthcare reform and federal funding, health insurers will likely reassess their commitment to the exchange marketplace — assuming, of course, that the ACA isn’t repealed.
"It seems this is more motivated by political and regulatory uncertainty, and it could be a sign that Anthem would exit nationally,” Cynthia Cox, Associate Director for the Program for the Study of Health Reform and Private Insurance at the Kaiser Family Foundation, told the WSJ. “If that is the case, that could leave hundreds of thousands of people without any insurer option. This could be the tip of the iceberg.”