Another Insurer Leaves Missouri's Affordable Care Act Exchange

By Anna Wilde Mathews Features Dow Jones Newswires

Blue Cross and Blue Shield of Kansas City plans to pull out of the Affordable Care Act health insurance exchanges next year, a move that leaves a region in northwestern Missouri at risk of having no available marketplace plans.

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The nonprofit said that after losing more than $100 million on ACA plans through 2016, it will stop offering exchange plans in 30 counties in northwestern Missouri and two counties in Kansas. Blue Cross and Blue Shield of Kansas City is the sole marketplace insurer in 25 counties -- one-fifth of the total -- in Missouri, according to the Kaiser Family Foundation.

"This is unsustainable for our company," said Danette Wilson, chief executive of Blue Cross and Blue Shield of Kansas City, in a statement. The move will affect approximately 67,000 people, the insurer said. It began offering plans in 2014.

The decision by the Kansas City insurer is the latest sign of strain in the ACA exchanges, which sell health insurance to individuals. Humana Inc. and Aetna Inc. have already announced they will next year leave all of the marketplaces where they currently sell plans. Some insurers have been seeking large rate increases, citing claims costs and regulatory uncertainty.

Other states are facing the risk that some exchange consumers won't have any insurance products available. In Iowa, Medica has said it is considering withdrawing from the exchange, a move that could likely leave much or all of the state with no marketplace plans following earlier departures by other insurers.

Earlier this month, BlueCross BlueShield of Tennessee filled a potential gap left by Humana's exit when it said it would offer plans in the Knoxville region next year.

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Missouri is the latest state reeling from the loss of an ACA exchange insurer. Last year, UnitedHealth Group Inc. and Aetna both offered marketplace plans in the state, but they exited after 2016. Humana is also a current Missouri exchange insurer, according to the Kaiser foundation.

The lack of any exchange plans in a region presents a unique challenge. The ACA mandates that most people acquire health coverage, and offers subsidies to help lower-income consumers buy plans. To obtain the subsidies, though, people are supposed to buy their plans through health-law exchanges.

Federal regulators are able to spare people from the law's penalty for non-coverage under certain circumstances, and they could offer some sort of waiver to people in counties with no exchange plans, experts said.

But the current law doesn't appear to leave any wiggle room that would allow people in places with no exchange plans to obtain subsidies to help with their premiums, experts said. If insurers are still selling individual coverage outside the ACA exchange, those consumers could potentially purchase it, but they wouldn't get the federal aid. "I don't see any way around that," without changing the law, said Timothy S. Jost, an emeritus professor at Washington and Lee University.

Consumers like Doug McBride, 62, of Des Moines, are worrying about what will happen. Mr. McBride, who owns his own photography and video-production business, currently has an Aetna exchange plan, and already knows he will have to switch insurers next year when Aetna withdraws. But if no insurer offers plans on the marketplace, he could lose access to the federal help that pays about $1,000 a month toward his and his wife's combined monthly premium of nearly $1,300.

Without the federal subsidy, Mr. McBride said, he would likely not be able to afford coverage, and he would return to being uninsured, as he was before the ACA's main provisions kicked in in 2014. "We are scared about it, we're really worried about it," said Mr. McBride, who takes a blood thinner because of a clotting condition stemming from surgery he got after an old injury.

Some companies, figuring that a number of consumers could be trapped in such situations, are working on alternatives. EHealth Inc. executives said the company is working on lower-cost coverage options that will fall short of the full protections of major medical plans, but likely be more affordable than ACA-compliant insurance.

Write to Anna Wilde Mathews at anna.mathews@wsj.com

Blue Cross and Blue Shield of Kansas City plans to pull out of the Affordable Care Act health-insurance exchanges, a move that likely leaves a swath of northwestern Missouri with no available marketplace plans for next year.

The nonprofit is the sole marketplace insurer in 25 counties in Missouri, according to the Kaiser Family Foundation. Unless another insurer steps in, people who purchase individual insurance plans in those counties will have no options on the exchange, and thus will be unable to obtain federal subsidies that help pay premiums for most enrollees.

The decision by the Kansas City insurer is the latest sign of strain in the ACA exchanges, which sell health insurance to individuals. Humana Inc. and Aetna Inc. have already announced they will next year leave all of the marketplaces where they currently sell plans. Some insurers have been seeking large rate increases, citing claims costs and regulatory uncertainty.

Insurers have also said that more rate increases and withdrawals are likely if the Trump administration and Congress don't commit to continuing federal "cost-sharing" payments that support reduced costs for low-income ACA enrollees.

Thursday, a different insurer, Blue Cross and Blue Shield of North Carolina, said it was proposing an average rate increase of 22.9% on its 2018 ACA plans, but the increase would be 8.8% if the cost-sharing payments were guaranteed. "At this point, we did not have the confidence in receiving that funding," said Brian Tajlili, director of actuarial and pricing services for the North Carolina insurer. He said the marketplace in the state appeared to be stabilizing.

Other states, like Missouri, are facing the risk that some counties will be left "bare" and exchange consumers won't have any insurance products available. In Iowa, Medica has said it is considering withdrawing from the exchange, a move that could likely leave much or all of the state with no marketplace plans following earlier departures by other insurers.

Earlier this month, BlueCross BlueShield of Tennessee filled a potential gap left by Humana's exit when it said it would offer plans in the Knoxville region next year.

Blue Cross and Blue Shield of Kansas City said it decided to pull out after losing more than $100 million on ACA plans through 2016. It will stop offering exchange plans in its coverage area, which is 30 counties in northwestern Missouri and two counties in Kansas.

"This is unsustainable for our company," said Danette Wilson, chief executive of Blue Cross and Blue Shield of Kansas City, in a statement. The move will affect approximately 67,000 people, the insurer said. It began offering plans in 2014.

Missouri has seen a number of exits from the exchange, though not all counties will be left bare by the Blue Cross pullout. Last year, UnitedHealth Group Inc. and Aetna Inc. both offered marketplace plans in the state, but they exited after 2016. Humana is also a current Missouri exchange insurer, according to the Kaiser foundation.

Anthem Inc., another major exchange player in Missouri, has said it is reconsidering its marketplace business. If the cost-sharing payments aren't locked in, Anthem has said it would consider pullbacks and exits, as well as sharp premium increases, for next year.

The lack of any exchange plans in a region presents a unique challenge. The ACA mandates that most people acquire health coverage, and offers subsidies to help lower-income consumers buy plans. To obtain the subsidies, though, people are supposed to buy their plans through health-law exchanges.

Federal regulators are able to spare people from the law's penalty for noncoverage under certain circumstances, and they could offer some sort of waiver to people in counties with no exchange plans, experts said.

But the current law doesn't appear to leave any wiggle room that would allow people in places with no exchange plans to obtain subsidies to help with their premiums, experts said. If insurers are still selling individual coverage outside the ACA exchange, those consumers could potentially purchase it, but they wouldn't get the federal aid. "I don't see any way around that," without changing the law, said Timothy S. Jost, an emeritus professor at Washington and Lee University.

Consumers like Doug McBride, 62 years old, of Des Moines, are worrying about what will happen. Mr. McBride, who owns his own photography and video-production business, currently has an Aetna exchange plan, and already knows he will have to switch insurers next year when Aetna withdraws. But if no insurer offers plans on the marketplace, he could lose access to the federal help that pays about $1,000 a month toward his and his wife's combined monthly premium of nearly $1,300.

Without the federal subsidy, Mr. McBride said, he would likely not be able to afford coverage, and he would return to being uninsured, as he was before the ACA's main provisions kicked in in 2014. "We are scared about it, we're really worried about it," said Mr. McBride, who takes a blood thinner because of a clotting condition stemming from surgery he got after an old injury.

Some companies, figuring that a number of consumers could be trapped in such situations, are working on alternatives. EHealth Inc. executives said the company is working on lower-cost coverage options that will fall short of the full protections of major medical plans, but likely be more affordable than ACA-compliant insurance.

Write to Anna Wilde Mathews at anna.mathews@wsj.com

(END) Dow Jones Newswires

May 25, 2017 12:47 ET (16:47 GMT)