Anthem to Pull Out of Ohio Affordable Care Act Exchange -- 2nd Update

Anthem Inc. said it will pull out of the health-insurance exchange in Ohio next year, leaving a second region of the country poised to have no marketplace options under the Affordable Care Act and increasing pressure on Republicans as they seek to replace it.

The move would be 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. It comes after Humana Inc. and Aetna Inc. both said they will exit all of their current health-law exchanges next year.

Anthem's exit will leave at least 18 Ohio counties with no exchange plans available next year, based on preliminary filings made by insurers, according to the Ohio Department of Insurance. Unless another insurer steps up, 25 counties in western Missouri are facing the same situation, after Blue Cross and Blue Shield of Kansas City said it would leave the exchanges next year.

Anthem said the market remains volatile and it cited the uncertainty surrounding key issues, including federal "cost-sharing" payments that help reduce costs for low-income ACA enrollees.

Anthem's decision was immediately seized on by both sides of the debate over the Republican health bill. Republicans, who have pointed to insurers' withdrawals and rate increases as signs of trouble with the ACA, said the move was evidence of the need for new legislation. President Donald Trump mentioned the Anthem withdrawal at a White House meeting with congressional Republican leaders on Tuesday.

"This is one more reason why the status quo on health care is unsustainable," said Sen. Rob Portman, an Ohio Republican.

Democrats have said Anthem and other insurers are reacting to uncertainty created by GOP lawmakers and the Trump administration, particularly over the future of the federal cost-sharing payments. Democratic Sen. Sherrod Brown of Ohio blamed Anthem's exit on "the dangerous game President Trump and Washington politicians are playing."

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 the cost-sharing payments. The House Republican health bill didn't include an appropriation for those payments for next year, and President Trump has threatened to stop them.

The Senate is weighing health-care legislation, though a meeting of Senate Republicans on Tuesday produced little progress, according to some GOP lawmakers and aides. Lawmakers are sharply divided over funding for Medicaid, and some are saying the effort may fail. The 2010 health law brought sweeping changes to Medicaid, including significant federal funding that helped 31 states expand eligibility in the program.

According to the Kaiser Family Foundation, 32% of U.S. counties, a total of 1,021, are down to just one exchange insurer in 2017 -- up from 7%, or 225, in 2016.

When there are no ACA exchange plans in a region, consumers are stranded because the situation essentially short-circuits the way the existing 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.

Anthem 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 foundation.

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. Anthem has said it is evaluating its ACA plans on a state-by-state basis, and it hasn't disclosed final decisions for any state other than Ohio.

In announcing its Ohio decision, Anthem said 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 an "increasing lack of overall predictability simply does not provide a sustainable path forward to provide affordable plan choices for consumers."

The Ohio insurance department said in a statement that 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 Ohio has 11 exchange insurers overall this year, down from 17 in 2016.

Another region at risk of having no exchange plans next year, around Knoxville, Tenn., was able to avoid a coverage gap when BlueCross BlueShield of Tennessee agreed to re-enter the area for 2018.

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

Insurance analysts have said that it isn't clear what federal and state regulators can do to help people in regions with no exchange plans, absent a change in the law. Federal regulators are able to spare people from the ACA penalty for having no coverage, and they could offer a waiver to people in counties with no ACA exchange plans, analysts 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.

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.

There are also 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.

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. 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.

--Stephanie Armour and Louise Radnofsky contributed to this article.

Write to Anna Wilde Mathews at

(END) Dow Jones Newswires

June 06, 2017 20:23 ET (00:23 GMT)