States scramble to prevent ObamaCare exodus

Insurance commissioners are pulling out all the stops to keep insurers from leaving their states amid uncertainty over ObamaCare’s future. 

They are offering insurers new, previously unheard of flexibilities to try to keep them in the market.

But the effort faces an uphill climb, given the Trump administration’s wobbling over whether it will continue federal payments that compensate insurers for subsidizing out-of-pocket costs for lower-income households. There’s also the question of whether Congress will repeal ObamaCare this year. 

{mosads}Insurers are skittish and pleading for certainty from Washington. They want assurances that they will continue to receive cost-sharing reduction payments from the federal government, which total about $7 billion this year.

But no such promise appears forthcoming, prompting insurance commissioners to try and hold things together with later filing deadlines for enrollment and new concessions to insurers. 

“As a regulator, instead of being rigid on timelines, the type of pricing I’m going to want, I’m being more open about this,” said John Franchini, New Mexico’s insurance superintendent. “I’m trying to be more flexible to give them confidence that if things change, we as regulators will be flexible with them.”

The biggest fear of the insurance commissioners is having every carrier pull out of a market, leaving people with no ObamaCare plans to buy. It’s a situation that hasn’t happened before, but could happen this year.

In several states, such as California, companies can file two different sets of premium requests: one for the continuation of ObamaCare — such as cost-sharing reduction payments and the enforcement of the individual mandate — and one for if both are discontinued.

“Based on what we were hearing from insurers, we anticipated Trump rates would be double-digit increases over the past year,” California Insurance Commissioner Dave Jones said. “I wanted to give insurers the opportunity to file rates based on Trump.”

Insurers are facing imminent deadlines in many states to submit their preliminary premium requests and state whether they’ll stay in the market. They also face a June 21 deadline to tell the federal government whether they’ll participate in ObamaCare next year. 

According to the National Association of Insurance Commissioners, some states could look to follow the lead of Alaska, which is creating its own reinsurance program. The programs usually involve a mix of state and federal money to help subsidize insurance companies’ payments on high claims. This type of state-based arrangement is popular with the Trump administration, and HHS Secretary Tom Price has encouraged other states to adopt similar models.    

Washington state may be interested in the idea, according to Mike Kreidler, the state’s insurance commissioner. He is also floating tax relief for insurance companies that operate in rural counties, and requiring that companies offer plans in both urban and rural areas.

But at the end of the day, “I don’t have any leverage to tell a health insurer they have to stay in the market,” Kreidler said. “The GOP is scaring the bejesus out of them, and I’m trying to calm things down and work it out.”

GOP lawmakers say the Affordable Care Act’s insurance marketplaces are in a death spiral, with their repeal effort aimed at saving the country from a failing law. Democrats say Republicans are purposely trying to make ObamaCare collapse.

Amid the partisan bickering, insurers don’t know what to plan for, and that’s showing in their filings. 

Pennsylvania’s five insurers, for example, filed premium increases averaging nearly 9 percent. But that increase could be hiked up to 36 percent without the individual mandate to have insurance and the cost-sharing reduction payments.

BlueCross BlueShield of North Carolina said last month it is planning an average rate hike of almost 23 percent for both on- and off-exchange plans, primarily because of the uncertainty around the cost-sharing payments. If the payments were guaranteed, the rates would go up less than 9 percent, the company said. 

Kevin Counihan, who served as a CEO of HealthCare.gov during the Obama administration, said the uncertainty and declining support from the Centers for Medicare and Medicaid Services has made insurance commissioner’s roles even more important.

“In environments like that, the insurance companies and the [state departments of insurance] are probably going to be more engaged,” Counihan said. 

Counihan played an active role in enticing an insurer to sell plans in Pinal County, Ariz., last year — the first time an area saw every carrier exit its market.

But it’s already happened at least twice this year.

Blue Cross Blue Shield of Kansas City pulled out of the individual markets on-and-off the exchange last month, leaving about 25 Missouri counties without any plan options for 2018.

In February, Humana announced it wouldn’t sell insurance on ObamaCare’s exchanges for 2018, a move that left the greater Knoxville area in Tennessee without any carriers.  

Tennessee’s insurance commissioner, Julie Mix McPeak, quickly began having frequent conversations with the only two insurance companies selling in the state — Cigna and BlueCross BlueShield of Tennessee. Meanwhile, meetings with Humana continued to see if there was anything the state could offer to get them back in, such as regulatory approvals or operational flexibility. 

Eventually, BlueCross BlueShield of Tennessee agreed to come into the market — with a few caveats. For instance, it could exit the market “in the event of any post-bid changes that destabilize the market,” the company said in a letter.

“I can’t say that I’m responsible for BlueCross BlueShield coming back into the market,” McPeak said. “I’m certainly thrilled that they made that decision, but I think that our continued conversation and trying to work together to address the problem of lack of competition in Tennessee was a big factor.” 

Even states that have multiple insurers offering plans are in talks to bring carriers back into their markets. Kreidler said he recently met with UnitedHealthcare and is “really pushing hard to see if [Washington] can get United back in,” though the company has left all but a handful of the ObamaCare exchanges.

“But with all this uncertainty making it much more challenging to make a sale for a company like that,” he said.   

Many Republicans say they are interested in a short-term fix to stabilize ObamaCare, but haven’t detailed what it would be.

Tennessee GOP Sens. Lamar Alexander and Bob Corker proposed legislation that would allow people to use their ObamaCare tax credits to purchase any state-approved plan — but only if there aren’t any insurers selling policies on the ObamaCare exchange in their area.

As a counter to the Alexander bill, Sen. Claire McCaskill (D-Mo.) introduced legislation that would allow people who live in “bare counties” without any ObamaCare insurers to buy coverage on the D.C. exchange, where most members of Congress and congressional staff purchase insurance.