Anthem is the latest major insurer to voice its displeasure with the uncertainty and political gamesmanship roiling the Affordable Care Act markets, and is now sending signals that it may pull out of the system next year.
If Anthem and its Blue Cross-Blue Shield affiliates do in fact pull back in 2018, as Jefferies analysts David Windley and David Styblo said is “likely” to happen in a note on Thursday, it would leave more than 800,000 individual plan customers in 14 states either without subsidized Obamacare coverage or more limited choices.
About 255,000 people throughout Colorado, Kentucky, Missouri and Ohio would have no Obamacare insurers beginning in 2018 if Anthem were to pull out, according to a recent analysis by Axios. Meanwhile, 560,000 people in eight other states would have just one insurer to turn to.
Anthem was noncommittal in reacting to the report of its imminent departure from the market. According to Reuters, the analysts said that, based on conversations with the company, “Anthem is leaning toward exiting a ‘high percentage’ of the 144 rating regions in which it currently participates.”
The company said in a statement, “We continue to actively pursue policy changes that will help with market stabilization and achieve the common goal of making quality health care more affordable and accessible for all.”
Reading between the lines, the company’s message seems to be that unless Washington gets its act together on health care, Anthem will join other insurance giants like UnitedHealth Group, Cigna, Humana and Aetna in pulling out of Obamacare markets in many regions of the country.
It’s an axiom of the health care industry that insurance companies need certainty and relative tranquility in the marketplace to effectively map out a strategy and set premium levels for the coming year if they are expected to stick with the program.
Instead, insurers and health care providers have been thrust into a crisis atmosphere in the wake of the collapse of the GOP Obamacare replacement legislation in the House last week. Since then, Trump and House Speaker Paul Ryan (R-WI) have been giving conflicting signals on what if anything will be done to try to recoup their losses and eventually push through changes.
Meanwhile, since shortly after Trump took office, the new administration has been pursuing a series of administrative actions to try to undermine Obamacare, in an apparent effort to lend credence to the Republicans’ assertion that the health care law is in a “death spiral” of soaring premiums and shrinking coverage.
One way Trump administration could effectively torpedo Obamacare is by killing off a $7 billion a year out-of-pocket cost-sharing subsidy for insurers and moderate and middle-income people. The subsidies, considered essential by consumers and insurance companies in order to keep insurance costs affordable, are projected to rise to $10 billion next year.
The provision has suffered a serious setback in federal court. If Trump and Health and Human Services secretary Tom Price decide to drop an appeal by the Obama administration of the adverse ruling, then the subsidy likely would go down the drain – with dire consequences for the future of Obamacare.
Ryan optimistically told reporters on Thursday that Trump could keep the subsidies alive while the case works its way through the courts. “While the lawsuit is being litigated, then the administration funds these benefits,” Ryan said, “That’s how they’ve been doing it, and I don’t see any change in that.”
But Ryan’s assurances apparently weren’t good enough for many insurance executives, according to a quick survey of the industry by Axios. Many executives said they want a pledge from Trump that the subsidies will continue before the commit to another season with Obamacare.
“Speaker Ryan’s comments are encouraging but not clear enough for companies to make solid business decisions,” said Ceci Connolly, the CEO of the Alliance of Community Health Plans, a not-for-profit network. “If the House maintains its lawsuit and the Trump administration drops the appeal, millions of working families will lose those vital subsidies.”