The Affordable Care Act’s insurance exchanges have become too risky for major health insurers, and that’s creating further doubt about coverage options consumers might have next year.
Anthem CEO Joseph Swedish said Wednesday his company is waiting to see whether the government makes some short-term fixes to the shaky exchanges before it decides how much it will participate next year. The Blue Cross-Blue Shield carrier is the nation’s second largest insurer and sells coverage on exchanges in 14 states.
This is a separate and more immediate concern for consumers beyond whether the ACA will continue to exist. Congressional Republicans and President Donald Trump have vowed to repeal and replace the law. Republicans have promised they won’t strand those now covered under the program, but they also haven’t detailed their replacement plan.
Even if parts of the law continue to exist in some form, as many expect, the insurance exchanges through which millions have bought coverage are in peril. Swedish told Wall Street analysts during a conference call that if Anthem doesn’t see stability in the exchanges heading into next year, “then we will begin making some very conscious decisions with respect to extracting ourselves.”
The enrollment window for 2018 coverage is still several months away, but insurers have to decide by this spring whether they will participate.
Aetna, the nation’s third largest insurer, said Tuesday that it will announce by April 1 whether it will stay in any of the four states where it currently sells coverage. Aetna said it lost $450 million last year on its ACA-compliant coverage — a big hit from a small slice of its overall business.
The losses that insurers have taken from coverage sold on these state-based exchanges in recent years have already prompted some to scale back their participation or raise rates, often dramatically. The higher prices and dwindling choices have made the markets unappealing for many consumers.
Insurers say they’ve struggled to attract young, healthy customers to their risk pools to help keep coverage costs in check. They also say they’ve been hurt by expensive customers who use special enrollment periods to sign up for coverage only when they need help paying big medical bills.
Swedish, the Anthem CEO, said Wednesday that his company has had extensive talks with Congressional leaders. Anthem would like to see fewer special enrollment periods and better verification of patients who are eligible, as well as the repeal of a health insurance tax and other fixes.
“While the direction in Washington has been positive, we still need certainty about short-term fixes in order to determine the extent of our participation in the individual market in 2018,” he said.
Separately, Tennessee insurance commissioner Julie McPeak told a US Senate panel Wednesday that Congress needs to send the industry a clear signal by March to avoid disrupting the individual health insurance market for 2018.
“You need to provide some indication to plans as a quickly as possible,” she told the Health, Education, Labor and Pensions committee.
Representatives of the U.S. Department of Health and Human Services did not respond Wednesday to requests for comment on the exchanges.
Congress may wind up addressing several insurer concerns, but short-term fixes may not be enough to guarantee 2018 exchange participation, according to Gary Claxton, an insurance expert at the nonprofit Kaiser Family Foundation.
Claxton thinks insurers also will watch closely the debate over the fate of the ACA and, with it, the long-term prospects of the individual insurance market.
“Insurers really have to believe they see a future for a little while longer to continue to invest,” he said.