Tipsheet

It's Failing: Major Insurer Exits Another State, Leaving 20 Ohio Counties With Zero Obamacare 'Choices'

Guy Benson
Guy Benson  |  June 07, 2017 10:35 AM

Aetna in Virginia. Blue Cross Blue Shield in Kansas City, Nebraska and Iowa. Now Anthem in Ohio.  And those are just the headlines since April.  Obamacare is falling apart at the seams, and as predicted, it keeps getting worse. And in spite of Democrats' buck-passing "GOP sabotage" spin -- which never accounted for massive Obamacare face-plants in deep blue states -- this latest failure has occurred in Buckeye country, where Governor John Kasich famously embraced the law's (over-budget) Medicaid expansion and has defended his decision vociferously. Ohio, in other words, is hardly poster child for supposed Republican treachery. And yet, here we are:

Anthem, one of the nation’s largest insurers and a major player in the individual insurance market created by the federal health care law, announced on Tuesday that it will stop offering policies in the Ohio marketplace next year. The decision leaves about a fifth of the state’s counties potentially without an insurer for 2018, affecting some 10,500 people. While Anthem, which operates for-profit Blue Cross plans in more than a dozen states, said it had not yet made any decision about its participation in other states exchanges, the departure is a worrisome sign that even some of the individual market’s stalwarts are having second thoughts. If Anthem were to exit the federal health insurance exchanges entirely, “there could be hundreds of thousands of people without any option on the exchange,” said Cynthia Cox, an executive at the Kaiser Family Foundation, which has been tracking insurer participation in the state marketplaces, or exchanges, closely.
Fear not, for the worst is yet to come.  A report from the Department of Health and Human Services released at the end of may demonstrated that Obamacare's average individual market premiums in Ohio increased by 86 percent between 2013 and 2017, which is actually better than the 105 percent average nationwide increase on the federal exchange.  Those rate spikes still could not make the market sustainable enough to keep Anthem in the mix, and now every carrier has pulled out of roughly 20 percent of the state's counties.  The status quo is a deteriorating mess, for which the Democrats are responsible.  Republicans campaigned for the better part of a decade pledging to clean up that mess and supplant it with a better alternative.  The House-passed American Health Care Act was one step in that direction, but much work is yet to be done.  The GOP-held Senate must act.  In the face of these harmful disruptions for consumers and families, and with the grim punchline of "affordability" on rerun, letting 'repeal and replace' wither on the vine would be unacceptable.  It's just not good enough to run on a clear promise, then give up because the politics are difficult.  Right-leaning healthcare wonk James Capretta is out with several new analyses, including a review of the latest Congressional Budget Office scoring of the AHCA (which makes some of the same points that we have), as well as a renewed call for Republican Senators to consider the "auto enroll" option we discussed with Lanhee Chen of the Hoover Institution:
Republicans in Congress would like to roll back key provisions of the ACA and replace them with alternative provisions. In May, the House passed the American Health Care Act (AHCA), which would eliminate the ACA’s requirement that most people enroll in coverage or pay a tax. In its place, the legislation would impose a 30-percent premium surcharge for one year for anyone with more than a two-month break in their coverage. To minimize the number of people paying this penalty, policy makers must take steps to increase the take-up of insurance. Boosting enrollment is also important for stabilizing the individual insurance market. Currently, under the ACA, the markets are less stable than they could be, or should be, because there are too few younger and healthier enrollees. Automatic enrollment would boost enrollment into insurance among this group of potential customers, and thus help create a more balanced risk pool. We believe that automatically enrolling Americans eligible for tax credits into no-premium health plans should be an important component of a renewed effort at health reform. Many of the uninsured who do not make plan selections on their own can be enrolled into plans that provide true insurance against significant or catastrophic health events. Individuals who are auto-enrolled will have the opportunity to opt-out of that coverage if they prefer; they will also be given the opportunity to switch to a different plan during the next available open enrollment period.

The idea would be to peg the annual all-in premium price tag of the most basic plan in each state to the value of the tax credits offered under the new law, then automatically enroll individual market consumers who haven't chosen other options. Click through for Capretta and Chen's ideas about how implementation might work. Meanwhile, the White House is doing what it can to apply pressure to Congress not to fumble this ball, even with many distractions (some of them Trump-created) swirling.  Trump and Pence lobbied Republicans on the Hill to maintain their legislative agenda, with a trio of top administration officials meeting with Obamacare victims this week.  I'll leave you with this visualization from Bloomberg, which does not take into account the darkening picture emerging ahead of 2018: