How far will we fall?

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Just last week Ohio fell victim to another insurance carrier leaving the individual ACA exchange market, Anthem Blue Cross / Blue Shield. In some respects, this is the same news that we’re hearing in states around the country so it may not seem too alarming. But what makes Anthem’s exit in Ohio (again, to be clear, this is individual ACA business only, NOT ‘grand mothered’ individual policies or any employer-sponsored group plans) different is that Anthem has been the largest writer of individual business in the state for decades, pre-ACA. Now, because of having to operate under the ACA requirements, the largest writer of individual business for decades has decided they’ve had enough.

For years, Ohio was considered to have one of the strongest insurance markets in the country. Although not everyone qualified for individual plans before the ACA because of health risks, carriers were required to offer HIPAA plans, policies that were issued on a guaranteed issue basis to individuals who were unable to obtain a policy in the standard market. Once the ACA came about, these HIPAA policies went away and all newly issued individual policies had ACA protections such as guaranteed issue, no exclusions for pre-existing conditions, and community rating, to name a few. While this all sounds well and good for the consumer – and to some extent it is – it has also created a market that is fraught with unknown risk and is therefore financially unfriendly to carriers, so in many cases, rather than losing millions upon millions of dollars, it’s just easier for them to pick up their ball and go home. To give you some idea, as recently as LAST YEAR, 2016, 17 health insurers offered individual plans in Ohio, and all 88 counties had at least 4 different carriers writing business. In 2017, one year later, only 11 insurers are writing individual business and over half of the 88 counties have only one or two carriers to choose from. Once Anthem pulls out in 2018, there will be 18 counties (approximately 10,500 people) that have NO insurance carrier offering individual policies. So how does this work – individuals have a mandate to buy coverage but there are no carriers who can afford to sell them? Does this seem like improved access?

While Anthem has publicly stated that it has struggled to reach this decision, it’s not hard to understand why they decided to finally pull the plug. The most obvious reason – only about 3% of Anthem’s revenue comes from the sale of Individual insurance. 3%! Anthem insurers 3.4 million people across the state in a variety of different plans, including small and large group plans. They don’t need to sit around wringing their hands waiting for the government to figure out how to prop up the wrecked individual market for 3% of their revenue! And remember, this is the company who has written the most individual coverage in the state for years.

According to the Ohio Department of Insurance, since 2013 premiums in the individual market in Ohio have increased 91%. Is this the ‘affordability’ part of the ACA? We’re reaching a very, very critical point. With all of the ACA restrictions it has become nearly impossible for insurance companies to turn a profit in the individual market, so instead of losing millions of dollars a year (think Aetna and UnitedHealthcare), they pull out. We have to get back to a system where insurance companies are able to monitor and account for risks, and to charge appropriate premiums for the risk they take on. We also need to create high risk pools for those who are unable to qualify for coverage in the standard market. Or better yet, how about letting those who are not able to qualify for a policy in the standard market buy-in to something like the state employee’s plan – a large risk pool that is able to absorb risk and that is already entirely subsidized with tax payer dollars? I don’t know, it doesn’t seem like it should be this difficult. But how far will we fall before we get serious and are willing to make the tough decisions in order to preserve some sense of a healthy insurance market?

#TAHBenefits, #health, #anthem

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