Anthem intends to exit two more state exchanges next year. What does that mean for your clients?
Anthem Inc.’s decision to exit Affordable Care Act (ACA) exchanges in Nevada and Georgia crystallizes the continued fallout from Congress’ failed attempt to repeal and replace the ACA. The company cited President Trump’s possible withholding of cost-sharing subsidies for low-income enrollees as the primarily reason for the pullout. Other motivations included the Administration’s decision to not enforce the individual mandate and the restoration of a temporarily suspended tax on health insurers.
The exits come at a critical moment for state exchanges, as health insurers start submitting their exchange rate plans for 2018 to state insurance agencies. In a statement, Anthem said that setting pricing at this time “has become increasingly difficult due to a shrinking and deteriorating individual market, as well as continual changes and uncertainty in federal operations, rules, and guidance.”
A Frayed Relationship
Anthem’s intended departure from Nevada and Georgia follows its June announcement that it will withdraw from exchanges in Ohio, Wisconsin, and Indiana next year. It further announced earlier this month that it would not offer exchange-based plans in 16 of 19 pricing regions in California in 2018.
In Nevada, no exchange health plans would be available in 14 out of 17 counties, the state’s Insurance Commissioner Barbara Richardson said in a statement to Reuters. However, she added the eventual Anthem retreat would not increase the number of counties without a provider. Anthem stated that low-income Nevada residents under age 30 or earning a low income could still purchase off-exchange “catastrophic plans” next year.
Prior to its announced withdrawal, Richardson told Business Insider that Anthem had proposed an average 62% rate hike — an increase that didn’t factor in the potential loss of the cost-sharing subsidies. She also noted that withholding federal funds would have raised rates in even higher.
Out of the 159 counties in Georgia, Anthem will operate as the sole insurer in 85 mostly rural counties in 2018. Despite the recent exits, the insurer will remain on 14 state Obamacare exchanges next year, according to CNN Money.
Will Anthem Return?
President Trump has repeatedly urged lawmakers to not abandon healthcare reform, and bipartisan committees in the Senate and House have formed to design a program to strengthen the individual marketplace. In statement to Fortune, Anthem left open the possibility of returning to the individual marketplace. The insurer stated that it “will continue to advocate solutions that will stabilize the market and allow us to return to a more robust presence in the future.”
As negotiations continue, insurance agents can monitor developments on the state level. The exit of a major insurer like Anthem, however, doesn’t necessarily mean that your clients enrolled on Obamacare will be left with no other options. A Nevada HealthLink spokesperson told Fortune.com that the roughly 22,000 Anthem ACA enrollees will be switched to a comparable plan next year.
If you work in a state in which current ACA providers will stop providing insurance, contact your state insurance department for options for any clients without ACA coverage next year. Now is the time to do your research to ensure your clients have the quality medical insurance they require in 2018.