The Affordable Care Act facing an uncertain future under the Trump administration, some insurers have become jittery enough to announce they are pulling out of government-run insurance exchanges in some states.
The latest announcement was made by one of the nation’s largest health insurers, Anthem, Inc., which said that it would pull out of the Ohio exchange for 2018, through which it currently insures more than 13,000 people – individuals who would have no other choice for coverage.
Analysts say the company, which insures more than 1.1 million people nationwide through exchanges, could further pull back from other government-run marketplaces as it assesses its “market footprint for next year.”
The decision comes on the heels of Aetna Inc. announcing that it would quit the Virginia exchange as it also seeks to limit its risk. Humana also announced this year that it would pull out of all exchanges it participates in for the 2018 policy year.
At the same time though, other insurers are reporting a more positive experience in exchanges, including being able to turn a profit, and others have announced plans to enter the exchange market.
Still, there are a number of reasons for some insurance companies bailing out of exchanges:
- Insurers have been hit with widening losses in certain state exchanges due to poor participation and/or a mix of enrollees that has too many individuals with health problems and not enough healthy ones.
- President Trump has announced that he may not authorize subsidy payments to insurers in the exchanges, a key part of the program, and his administration has not pursued defense of a lawsuit that challenged the legality of subsidies.
- Trump’s executive order to agencies responsible for regulating the ACA to craft regulations that may undermine the law.
- The House of Representatives passed the American Health Care Act, which in part would repeal the requirement that individuals purchase insurance if they are not covered through their employers and would abolish the subsidies to help them afford that coverage.
As it stands right now, more than 30,000 people with exchange-purchased plans won’t have coverage options coming into 2018 as a result of insurers already having opted to pull out of certain marketplaces, according to Bloomberg.
Anthem is the sole insurer in a number of regions, so if it decides to bail out of exchanges altogether, some 300,000 would be left with no exchange-coverage options.
For now, it’s not clear what can be done to provide coverage for individuals who have purchased coverage in regions where there is only one insurer providing exchange-based coverage.
There is no part of the ACA that provides for coverage via exchanges if no private insurers participate.
Light at the end of the tunnel
While some insurers have reported difficulties in turning a profit on exchange business, others seem to be thriving.
Most recently, Centene Corp. announced that it would start selling policies on the government-run exchanges in Kansas, Missouri and Nevada next year and that it plans to expand its existing presence in states where it already sells plans, including in Florida, Georgia, Indiana, Ohio, Texas and Washington.
According to a new report by Standard & Poor’s, the health law’s marketplaces are actually becoming more stable and may even churn out profits for some participating health insurers by 2018. It also noted that Blue Cross/Blue Shield is enjoying success.
“Looking forward, we expect insurers, on average, to get close to break-even margins in this segment in 2017,” Standard & Poor’s wrote in its report. “If the market continues unaffected, with a few fixes rather than an overhaul, we expect 2018, or Year 5 of the ACA individual market, to be one of gradual improvement with more insurers reporting positive (albeit low single-digit) margins.”