With health law in Flux, Insurers scramble to meet filing deadline. Mario Schlosser, C.E.O. of Oscar and one of its founders, at a TechCrunch event in New York last month. He wrote in a blog, “We’re confident that when the dust settles, the market for health insurance will stabilize in time for 2018.” Credit Eduardo Munoz/Reuters
As health insurers scrambled to decide whether to stay or go by Wednesday’s deadline to file plans for the federal marketplace, Anthem, one of the Obamacare market’s major players, announced that it would pull out of two more states, Wisconsin and Indiana, in 2018.
The company, which offers for-profit Blue Cross plans in 14 states, had already said this month that it would stop selling coverage in the marketplace next year in Ohio.
In making the announcement, Anthem said offering plans had “become increasingly difficult due to a shrinking and deteriorating individual market, as well as continual changes and uncertainty in federal operations, rules and guidance.”
Even as Senate Republicans hurry to finish their plan to overhaul the law, insurers are racing to meet not just federal but also state deadlines to submit rate requests.
While the Wednesday deadline does not represent a final commitment by any insurer, “it will be a good indicator of the health of these markets,” said Sabrina Corlette, a research professor at Georgetown University.
House Speaker Paul D. Ryan, whose home state of Wisconsin was among those Anthem plans to exit, pointed to the decision as reason the Republicans needed to pass their overhaul of the health care legislation.
“This law has failed our state,” he said. “Obamacare is clearly collapsing, and we have to step in before more families get hurt.”
Anthem’s exit underscores the rapidly changing dynamics of the market. Other insurers have indicated they will stay — and a few are even expanding into more states.
Oscar Health, the New York insurance start-up, said on Wednesday that it expected to offer policies in three additional states for 2018: Ohio, New Jersey and Tennessee. The company, which covers about 105,000 people, also plans to expand in California and Texas while remaining in New York. Oscar had previously sold policies in New Jersey but did not offer them there this year.
Counties With No Insurer in the 2018 Marketplace
Forty-four counties in three states currently have no insurer offering plans in the Affordable Care Act marketplaces next year.
“We’re confident that when the dust settles, the market for health insurance will stabilize in time for 2018,” Mario Schlosser, the company’s chief executive, wrote in a blog post. “For all of the political noise, there are simply too many lives at stake for representatives in Washington, D.C., not to do what’s right for the people.”
Other insurers also appear to be gambling on the current market, in spite of the political turbulence. Molina Healthcare, another major player in the market that has expressed concerns about its stability, said it had filed initial proposals in all nine states where it has business, according to a company spokeswoman.
Medica, a small nonprofit insurer, said on Monday that it would offer plans statewide in Iowa, although it is seeking rate increases that average 43 percent. Its decision would cover the yawning gap left by Aetna and the state Blue Cross plan, which left the market for next year, raising the possibility that no carrier would offer coverage to the bulk of the state’s residents.
Centene, another large insurer, announced its plans last week to offer coverage for the first time in Nevada, Missouri and Kansas.
But other insurers have emphasized they remain ambivalent about staying. Health Care Service Corporation, which operates nonprofit Blue Cross plans, said it would file proposals in all five states where it offers coverage, but could still decide to leave. The insurer covers more than one million people in the individual market.
The overall market appears to be worsening as more insurers leave, said Dan Mendelson, the president of Avalere, a consultant, who said “there is a lot of variation by local market.”
“There are some markets that are doing fine,” he said, while others, particularly rural ones, could still be left without an insurer willing to offer coverage.
Anthem’s departure from Wisconsin and Indiana, where the company is headquartered, does not seem to add to the dozens of so-called bare counties across the country where no insurer has yet said it will offer insurance in the state marketplace for that area.
Anthem covers about a million people through the state marketplaces or exchanges, and has filed proposals to sell policies in other states, like Connecticut.
Joseph R. Swedish, Anthem’s chief executive, at a House hearing in 2015. He recently told CNBC, “We may have to exit certain markets because those markets are not sustainable.” Credit Jacquelyn Martin/Associated Press
In the three states that it is leaving, the insurer will offer at least one plan outside of the marketplace that reserves the option of returning to that state to offer coverage.
“Anthem’s view of the future of the marketplaces has clearly turned negative, driven by some underlying market instability and uncertainty drummed up by the Trump administration,” said Larry Levitt, an executive with the Kaiser Family Foundation.
If an insurer misses the Wednesday deadline, regulators could still choose to accept a last-minute application, as they did last year in Arizona, to make sure residents have access to a policy through the state marketplace. “State officials and governors are going to be very pragmatic to make sure people have coverage,” Ms. Corlette said.
To stay, insurers are asking for much higher prices, according to Avalere, which analyzed filings in eight states. Insurers are seeking an 18 percent increase, on average, for the most popular so-called silver plans.
Many insurers are blaming the current political uncertainty when requesting much higher rates. The Trump administration and Congress have yet to commit to critical funding for subsidies worth billions of dollars to low-income individuals. Insurers are also concerned that the administration will stop enforcing the penalties people face when they choose to go without coverage, which they say would also drive up prices.
In Washington State, Molina is seeking rate increases that average 38.5 percent, citing the lack of enforcement and the return of a special tax on insurers. In developing its rates, the company said it assumed that major provisions of the law, including the existing subsidies and tax credits, would continue.
In Connecticut, Anthem wants an average rate increase of 33.8 percent, much of which it attributed to higher medical costs and increased demand for services.
“We are forecasting that the individual market will continue to shrink and that those individuals with greater health care needs will be the most likely to purchase and retain their coverage,” the insurer told state regulators.
Companies are likely to seek very high rates, said Ms. Corlette. They “are going to build all of this uncertainty into their rates to the maximum extent to protect themselves,” she said, and insurance regulators will have to decide whether to push back.
Even those insurers that plan to stay say the market has been challenging. While its losses have narrowed, Oscar lost about than $200 million last year and said that other changes were needed to stabilize the market. “We are not immune to the pressures in the individual market,” Mr. Schlosser said.
But he said the insurer’s partnerships with health systems like the Cleveland Clinic to offer new plans in northeastern Ohio should allow it to be successful. “If you have the right products and the right partner, you can make it work,” Mr. Schlosser said.