Anthem to Pull Out of Ohio Affordable Care Act Exchange -- Update

By Anna Wilde Mathews Features Dow Jones Newswires

Anthem Inc. said it will pull out of the Affordable Care Act health-insurance exchange in Ohio next year, a move that likely will leave at least 18 counties in the state with no available ACA marketplace plans.

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The move is the first withdrawal by Anthem, a huge exchange insurer that has warned repeatedly that it was weighing its future in the ACA marketplaces, which sell health insurance to individuals. The decision will likely create alarm in the other 13 states where Anthem offers individual health-insurance plans. So far, the insurer has filed 2018 ACA plans with regulators in other states, including Virginia, Maine and Connecticut, but it could still pull back.

The Ohio Department of Insurance said that, based on preliminary 2018 filings made by insurers, Anthem's move will leave at least 18 counties with no exchange plans available. Anthem is currently the only ACA exchange insurer in 20 Ohio counties, according to the Kaiser Family Foundation. The move will mark the second region at risk of being bare of ACA marketplace insurers, after Blue Cross and Blue Shield of Kansas City announced it would leave a large area of western Missouri next year.

In announcing the decision, Anthem said that setting prices and making decisions about ACA plans has become "increasingly difficult due to the shrinking individual market as well as continual changes in federal operations, rules and guidance." The insurer said the market remains "volatile," and it cited the uncertainty surrounding key issues including federal payments that help reduce costs for low-income ACA enrollees.

The insurer said an "increasing lack of overall predictability simply does not provide a sustainable path forward to provide affordable plan choices for consumers."

In a statement, the Ohio insurance department said it "is looking for options to help the approximately 10,500 Ohioans in counties where there may not be an exchange plan when this takes effect in 2018." The department said that Ohio has 11 exchange insurers overall this year, down from 17 in 2016.

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Anthem is only the latest insurer to pull back from the exchanges for next year. Humana Inc. in February announced it would exit all the health-law marketplaces next year. Aetna Inc. has also said it is pulling out of the exchanges where it currently offers plans.

Anthem said it would continue to offer individual health-insurance plans in one Ohio county, Pike, but they will not be available through the ACA marketplace.

Anthem's position on the ACA marketplaces is being closely watched because of its reach -- it is a major presence in its 14 state exchanges, with nearly 1.6 million people enrolled in its ACA plans, 1.1 million of those bought through the marketplaces. Overall, 302 counties in states including Georgia, Missouri and Ohio have only Anthem plans available on their marketplaces, according to the Kaiser Family Foundation.

The lack of any ACA exchange plans in a region essentially short-circuits the way the health law is supposed to function. The law, often called Obamacare, mandates that most people acquire health coverage, and offers government subsidies to help lower-income consumers buy plans. To obtain the subsidies, though, people are supposed to buy their insurance 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 ACA exchange plans, experts said. But they say 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 pay their premiums were they to buy insurance outside the exchanges.

Insurers have warned that there will likely be further withdrawals and sharp rate increases in exchange plans if they aren't given certainty about the future of the ACA, particularly whether the federal government will continue making payments to insurers that help reduce costs for low-income ACA enrollees. The Trump administration has threatened to stop this financing, known as cost-sharing payments, but so far has continued the payments.

The House, meanwhile, has passed a health bill that seeks to repeal most of the ACA, and the Senate is working on its own version.

Molina Healthcare Inc. has said it will leave ACA exchanges if the federal cost-sharing payments aren't locked in. Medica, a nonprofit insurer, has said it may withdraw from Iowa's exchange next year, a move that would likely leave much of the state with no ACA marketplace plans, after earlier-announced departures by other insurers.

Already there are signs that insurers are seeking significant increases in the price of their ACA marketplace insurance in a number of regions for next year, citing issues with the markets as well as uncertainty at the federal level. Anthem filed with state regulators for a 33.8% average rate increase for next year's individual plans in Connecticut and 37.7% in Virginia. CareFirst BlueCross BlueShield is seeking a 52% average increase in Maryland, 35% in Virginia, and 29% in the District of Columbia. 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 boost would be 8.8% if the cost-sharing payments were guaranteed.

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

(END) Dow Jones Newswires

June 06, 2017 14:38 ET (18:38 GMT)