In­surer with­drawals in Iowa set off alarms for in­di­vid­ual mar­ket

Modern Healthcare - - NEWS - By Shelby Livingston

The exit of two in­sur­ers from Iowa’s in­di­vid­ual mar­ket height­ens pres­sure on the Trump ad­min­is­tra­tion to de­cide whether it will sup­port the Af­ford­able Care Act-reg­u­lated mar­kets or watch them ex­plode.

Well­mark Blue Cross and Blue Shield was the first to an­nounce it will stop sell­ing ACA-com­pli­ant plans in Iowa in 2018, both on and off the fed­eral ex­change, though it will con­tinue of­fer­ing non-com­pli­ant plans. That will af­fect about 21,000 peo­ple. Well­mark said it lost $90 mil­lion over three years on ACA-com­pli­ant plans.

Then last week, Aetna said it will stop sell­ing in­di­vid­ual prod­ucts on and off the ex­change in Iowa. The de­ci­sion, the in­surer said, re­sulted from “fi­nan­cial risk and an un­cer­tain out­look for the mar­ket­place.” Aetna hasn’t de­cided whether to keep sell­ing ex­change plans in its three re­main­ing states.

That leaves just two in­sur­ers sell­ing ACA-com­pli­ant plans in Iowa—Min­nesota-based Med­ica, which sells plans in all 99 coun­ties in Iowa, and Wis­con­sin-based Gun­der­sen Health Plan, which sells in only five.

Med­ica hasn’t de­cided whether to con­tinue sell­ing plans in Iowa in 2018, say­ing it “needs to care­fully con­sider its op­tions.” Gun­der­sen said it would con­tinue sell­ing ex­change prod­ucts in the state. In most states, in­sur­ers have un­til June 21 to de­cide.

If Med­ica calls it quits, many Iowans will have no ACA-mar­ket­place in­sur­ance op­tions next year, and no plans that will al­low them to re­ceive ACA pre­mium sub­si­dies. That’s an un­prece­dented sit­u­a­tion with no clear fix.

About 51,000 Iowans en­rolled in mar­ket­place cov- er­age this year, with most of them re­ceiv­ing sub­stan­tial pre­mium sub­si­dies. Med­ica has about 14,000 mem­bers in Iowa, on and off the ex­change.

“This is a prob­lem cre­ated by the Af­ford­able Care Act and needs to be fixed by Congress,” said Iowa In­sur­ance Com­mis­sioner Doug Om­men, who was re­cently ap­pointed by Repub­li­can Gov. Terry Branstad, an op­po­nent of ACA who nev­er­the­less ex­panded Med­i­caid.

But ex­perts say Iowa’s de­ci­sion to let health­ier con­sumers keep non-ACA com­pli­ant plans has driven up pre­mi­ums in the ACA-reg­u­lated in­sur­ance pool.

For months, in­sur­ers around the coun­try have threat­ened to stop of­fer­ing ex­change plans at the end of this year if the Trump ad­min­is­tra­tion and Congress don’t lay out a clear reg­u­la­tory frame­work al­low­ing them to de­sign and price plans with­out los­ing money. The un­cer­tainty cre­ated by ef­forts to re­peal and re­place the ACA hasn’t helped.

The ad­min­is­tra­tion and Congress so far have failed to re­solve in­sur­ers’ most press­ing wor­ries—con­tin­ued fund­ing of fed­eral pay­ments to car­ri­ers for cost­shar­ing re­duc­tions for low-in­come en­rollees, and con­tin­ued en­force­ment of the re­quire­ment that nearly ev­ery­one buy cov­er­age. They’d also like to see risk pay­ments re­stored to pro­tect in­sur­ers from ex­tremely high-cost claims.

Well­mark CEO John Forsyth said his com­pany’s exit from the Iowa mar­ket for ACA-com­pli­ant plans was not a po­lit­i­cal state­ment about GOP health poli­cies. But, he added, pol­i­cy­mak­ers need to of­fer so­lu­tions to sta­bi­lize the in­di­vid­ual mar­ket, and “the tim­ing and rel­a­tive im­pact of those so­lu­tions is cur­rently unclear. This makes it dif­fi­cult to es­tab­lish plans for 2018.”

In­sur­ers also need to know the Trump ad­min­is­tra­tion will be an ac­tive part­ner in en­cour­ag­ing con­sumers to sign up for mar­ket­place cov­er­age, said Craig Garth­waite, a health econ­o­mist at North­west­ern Univer­sity. That would help at­tract more young, healthy cus­tomers to bal­ance out the costs of older, sicker en­rollees and keep pre­mi­ums down.

The CMS is rush­ing to fi­nal­ize a mar­ket sta­bi­liza­tion rule that in­sur­ers say would lower pre­mi­ums.

But the ad­min­is­tra­tion un­der­mined the ex­changes in Jan­uary by pulling en­roll­ment ad­ver­tise­ments, which was partly blamed for ex­change en­roll­ment drop­ping from 12.7 mil­lion last year to 12.2 mil­lion this year.

The clock is tick­ing. In­sur­ers have to de­cide in the next two months whether to sell 2018 plans on the ex­changes.

“I don’t know why any in­sur­ance com­pany would want to par­tic­i­pate in the in­di­vid­ual mar­ket given the pol­icy un­cer­tainty that’s flow­ing around it,” said Sab­rina Cor­lette, a health in­sur­ance ex­pert at Ge­orge­town Univer­sity. “The risks are so high.”

AP PHOTO

Aetna hasn’t de­cided whether to keep sell­ing ex­change plans in its three re­main­ing states.

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