Allergan CEO: Health care reform ‘stuck’
Anthem said it won’t participate on Ohio’s Obamacare exchange next year, citing growing uncertainty over the law’s future in Washington D.C.
The insurer ticked off a list of concerns, including "continual changes in federal operations, rules and guidance" and "an increasing lack of overall predictability."
"A stable insurance market is dependent on products that create value for consumers through the broad spreading of risk and a known set of conditions upon which rates can be developed," the company said in a statement.
The move will leave about 10,500 Ohio residents in at least 18 counties without an insurance option on the exchange unless another carrier steps in, according to the state’s Department of Insurance. The agency said it will try to identify other options for residents in these areas.
Anthem (ANTX), one of the largest Obamacare players, has said it is reviewing its involvement in the 14 states where it currently participates. The insurer has filed to be on the exchanges in some states for 2018, but it could still pull out. Anthem is a Blue Cross and Blue Shield company, which has served the individual market for more than seven decades.
If the company were to withdraw from all its markets, it could leave at least 275,000 people with no Obamacare option next year, according to the Kaiser Family Foundation.
Anthem joins a growing list of insurers exiting Obamacare for 2018. Humana (HUM), Aetna (AET), Wellmark Blue Cross and Blue Shield of Iowa and Blue Cross Blue Shield of Kansas City have all said they are pulling out, citing a mix of uncertainty and big losses from higher-than-expected bills racked up by sick policyholders. Some 19,000 Missouri residents could be stranded next year because of Blue Cross of Kansas City’s withdrawal.
Like its peers, Anthem is concerned that the Trump administration will stop funding the federal cost-sharing reduction subsidies that insurers receive to reduce deductibles and co-pays of lower-income Obamacare enrollees. The White House and House Republicans won’t commit to continue making these payments, despite pressure from many insurers, state officials, medical providers and others.
Also, Anthem cited the shrinking individual market — a half million fewer people signed up for Obamacare during open enrollment this year — and the return of an Obamacare tax levied on insurers that had been waived for 2017 as reasons for its departure.
Insurers, however, were leaving Ohio’s exchange even before President Trump took office in January, the state insurance department pointed out. Some 17 companies participated on the exchange in 2016, and there were at least four insurers offering policies in each of Ohio’s 88 counties.
This year, there are only 11 carriers on the exchange, and residents in 20 counties had only one insurer in their area, according to a fact sheet distributed by the agency.
"Before the Affordable Care Act (ACA) Ohio had a very competitive health insurance market — many companies offered plans so prices were relatively lower compared to other states," the fact sheet said. "New regulations from ACA have driven some companies out of Ohio and made it harder for them to do business, both of which have driven up the cost of health insurance in Ohio."