Medical Insurers Signal Big Shifts in State Coverage Plans --2nd Update

By Anna Wilde Mathews and Louise Radnofsky Features Dow Jones Newswires

Insurers sent mounting signals of trouble for next year's Affordable Care Act marketplaces, and their moves quickly played into the debate over the House Republican health bill expected to come to a vote on Thursday.

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Medica, a nonprofit insurer, said Wednesday it was considering withdrawing from Iowa's exchange next year, a move that would likely leave much of the state with no marketplace plans. The insurer, which has to file 2018 rates next month, can't make any decisions based on the Republican bill, said Geoff Bartsh, a Medica vice president: "It's an hour-by-hour change."

Aetna announced it would pull out of Virginia's exchange in 2018, after saying Tuesday it was going to substantially scale back its already-limited marketplace offerings.

Virginia also on Wednesday made public some of the first 2018 rate filings for exchange plans, which showed insurers asked for a range of premium increases, including several proposing substantial increases. Major exchange player Anthem Inc. said in a filing that it was seeking an average boost of 37.7%.

The new developments added to the signs of strain in exchanges around the country, kicked off by Humana Inc.'s announcement in February that it will next year withdraw from all marketplaces, leaving an area of Tennessee at risk of having no exchange insurers. Other insurers, including Anthem and Molina Healthcare Inc., have said they are weighing pullbacks.

Several insurers that disclosed exchange-plan moves Wednesday nodded to the uncertainty around the future of the ACA and key federal payments that help reduce costs for low-income enrollees.

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The White House said withdrawals were proof of the failure of the ACA. "It's especially important that we continue to make progress on repealing and replacing Obamacare as rates skyrocket and insurers keep fleeing the market around the country in anticipation of this impending implosion," said White House press secretary Sean Spicer Wednesday.

Democrats fired back. Virginia senators Mark Warner and Tim Kaine blamed the Trump administration, which has sent mixed signals about its intent for the federal cost-sharing payments, for Aetna's decision to pull out of their state. "President Trump playing politics with the system as insurers were getting ready to set their rates for 2018 only made matters worse," the men said in a joint statement.

Medica's statement about Iowa, which came in the wake of earlier announcements of planned 2018 withdrawals from the state by Wellmark Blue Cross and Blue Shield and Aetna, said the nonprofit insurer's "ability to stay in the Iowa market in any capacity is in question at this point." The insurer said it was looking for programs that would help siphon off the costs of the sickest consumers, such as a high-risk pool and/or a reinsurance setup, as well as more certainty around the future of the marketplaces' rules and structures.

Without the cost-sharing payments, "it's going to be pretty tough," said Mr. Bartsh.

Virginia so far has a number of insurers remaining in for next year, despite Aetna's announcement and an earlier disclosure by UnitedHealth Group Inc. that it will stop selling exchange plans in the state in 2018. Aetna pointed to "financial risk, and growing uncertainty in the marketplace" in its Virginia decision.

Still, some Virginia consumers may see big boosts in their premiums next year. Cigna Corp., for instance, said in its rate filing that it sought an increase in rates on its individual plans that would amount to 44.7% on average. CareFirst BlueCross BlueShield sought a rate increase averaging 21.5% on one category of plans, and 54% on another, though, like Cigna, it has limited Virginia enrollment; a CareFirst spokesman said that the average for all its Virginia individual plans was about 35%. Kaiser Permanente, with a larger enrollment, said its proposed increase would be 15%.

Several insurers included warnings in their rate filings that they may need to change their plans, reflecting the uncertainty around the future of the ACA. Cigna noted that its "participation in Virginia's individual health insurance market in 2018 is contingent upon market conditions" and said it "reserves the right to withdraw plans at any time" before open enrollment starts next fall. Anthem, reiterating a stance it has made public, said in its filing that if the federal cost-sharing payments aren't locked in for 2018 by early June, it would consider tweaking its filing to shrink in, or exit completely, certain markets, or bolster its rate proposal.

CareFirst noted that its proposed rates were pushed up because it expects that the individual coverage mandate included in the ACA won't be enforced next year, "and this will have the same impact as repeal."

The CareFirst spokesman declined to comment on the reasoning for the rates. Cigna and Anthem didn't immediately respond to requests for comment about their filings late Wednesday. Kaiser said in a statement that its rates "reflect our efforts to sustain and deliver high quality health care for all our members over the long term" and it plans to continue offering exchange plans in every region where it operates.

Write to Anna Wilde Mathews at anna.mathews@wsj.com and Louise Radnofsky at louise.radnofsky@wsj.com

Insurers sent mounting signals of trouble for next year's Affordable Care Act marketplaces, and their moves quickly played into the debate over the House Republican health bill expected to come to a vote on Thursday.

Medica, a nonprofit insurer, said Wednesday it was considering withdrawing from Iowa's exchange next year, a move that would likely leave much of the state with no marketplace plans. The insurer, which has to file 2018 rates next month, can't make any decisions based on the Republican bill, said Geoff Bartsh, a Medica vice president: "It's an hour-by-hour change."

Aetna announced it would pull out of Virginia's exchange in 2018, after saying Tuesday it was going to substantially scale back its already-limited marketplace offerings.

Virginia also on Wednesday made public some of the first 2018 rate filings for exchange plans, which showed insurers asked for a range of premium increases, including several proposing substantial increases. Major exchange player Anthem Inc. said in a filing that it was seeking an average boost of 37.7%.

The new developments added to the signs of strain in exchanges around the country, kicked off by Humana Inc.'s announcement in February that it will next year withdraw from all marketplaces, leaving an area of Tennessee at risk of having no exchange insurers. Other insurers, including Anthem and Molina Healthcare Inc., have said they are weighing pullbacks.

Several insurers that disclosed exchange-plan moves Wednesday nodded to the uncertainty around the future of the ACA and key federal payments that help reduce costs for low-income enrollees.

The White House said withdrawals were proof of the failure of the ACA. "It's especially important that we continue to make progress on repealing and replacing Obamacare as rates skyrocket and insurers keep fleeing the market around the country in anticipation of this impending implosion," said White House press secretary Sean Spicer Wednesday.

President Donald Trump on Thursday morning tweeted: "Death spiral! ' Aetna will exit Obamacare markets in VA in 2018, citing expected losses on INDV plans this year'."

Virginia Democratic senators Mark Warner and Tim Kaine blamed the Trump administration, which has sent mixed signals about its intent for the federal cost-sharing payments, for Aetna's decision to pull out of their state. "President Trump playing politics with the system as insurers were getting ready to set their rates for 2018 only made matters worse," the men said in a joint statement.

Medica's statement about Iowa, which came in the wake of earlier announcements of planned 2018 withdrawals from the state by Wellmark Blue Cross and Blue Shield and Aetna, said the nonprofit insurer's "ability to stay in the Iowa market in any capacity is in question at this point." The insurer said it was looking for programs that would help siphon off the costs of the sickest consumers, such as a high-risk pool and/or a reinsurance setup, as well as more certainty around the future of the marketplaces' rules and structures.

Without the cost-sharing payments, "it's going to be pretty tough," said Mr. Bartsh.

Virginia so far has a number of insurers remaining in for next year, despite Aetna's announcement and an earlier disclosure by UnitedHealth Group Inc. that it will stop selling exchange plans in the state in 2018. Aetna pointed to "financial risk, and growing uncertainty in the marketplace" in its Virginia decision.

Still, some Virginia consumers may see big boosts in their premiums next year. Cigna Corp., for instance, said in its rate filing that it sought an increase in rates on its individual plans that would amount to 44.7% on average. CareFirst BlueCross BlueShield sought a rate increase averaging 21.5% on one category of plans, and 54% on another, though, like Cigna, it has limited Virginia enrollment; a CareFirst spokesman said that the average for all its Virginia individual plans was about 35%. Kaiser Permanente, with a larger enrollment, said its proposed increase would be 15%.

Several insurers included warnings in their rate filings that they may need to change their plans, reflecting the uncertainty around the future of the ACA. Cigna noted that its "participation in Virginia's individual health insurance market in 2018 is contingent upon market conditions" and said it "reserves the right to withdraw plans at any time" before open enrollment starts next fall. Anthem, reiterating a stance it has made public, said in its filing that if the federal cost-sharing payments aren't locked in for 2018 by early June, it would consider tweaking its filing to shrink in, or exit completely, certain markets, or bolster its rate proposal.

CareFirst noted that its proposed rates were pushed up because it expects that the individual coverage mandate included in the ACA won't be enforced next year, "and this will have the same impact as repeal."

The CareFirst spokesman declined to comment on the reasoning for the rates.

A Cigna spokesman said "pricing reflects market conditions and underlying economics."

Anthem said, "recognizing the dynamics and level of volatility in the Individual ACA-compliant product offerings, our rate filings reflect the increases in the cost of delivering medical services coupled with pharmacy expenses and overall increased use of health-care services by members in ACA plans."

Kaiser said in a statement that its rates "reflect our efforts to sustain and deliver high-quality health care for all our members over the long term" and it plans to continue offering exchange plans in every region where it operates.

Write to Anna Wilde Mathews at anna.mathews@wsj.com and Louise Radnofsky at louise.radnofsky@wsj.com

(END) Dow Jones Newswires

May 04, 2017 09:30 ET (13:30 GMT)