Defying predictions, ObamaCare insurers see boom times ahead

Health insurers are finding success in ObamaCare this year and are planning to expand their offerings in many states, defying expert’s predictions.

Insurance startup Oscar Health filed to sell ObamaCare plans in Florida, Arizona and Michigan for the first time, and will enter new markets in Ohio, Tennessee and Texas.

Smaller insurers are also making moves, such as Bright Health in Tennessee and Presbyterian Healthcare in New Mexico. It will be the first time Bright Health is selling plans in Tennessee, while Presbyterian is returning to the state exchange after leaving in 2016.

Experts have been hailing these developments, saying that insurers have finally figured out how to become profitable in the ObamaCare marketplace.

But the success is also coming in the face of persistent GOP hostility toward the health-care law and brings the risk of double-digit premium hikes for customers.

“We have finally reached the point where insurers are making money in the [ObamaCare] marketplaces,” said Larry Levitt, a senior vice president at the Kaiser Family Foundation.

“The market is stable economically, but it’s stabilized where premiums are very expensive.”

In recent years, the number of insurance carriers in ObamaCare markets across the country has steadily declined.

Some of the country’s largest companies including United, Cigna and Humana pulled the majority of their plans from the exchanges. Insurance giant Aetna exited the exchanges entirely, citing massive losses and uncertainty over the future of the Affordable Care Act (ACA).

While the new round of initial rate filings are only preliminary, there’s been no sign of pulling back this year.

“It’s still early, but we haven’t seen any exits and we are certainly seeing new insurers enter markets and expand where they are doing business,” Levitt said.

“If not for the still significant political and legal uncertainty, we’d be seeing a very robust market right now,” he said.

But it is still too early to know the full picture on what premiums will look like around the country in 2019. And insurers are still bracing for more uncertainty from the Trump administration.

Next year, there will no longer be a financial penalty for people who don’t purchase health insurance. The administration is also opening the doors to expand cheap short-term plans that don’t meet ObamaCare’s coverage requirements.

Insurers are pointing the finger at those changes, arguing they will pull healthier people out of ObamaCare’s exchanges. Republicans have defended the moves, saying they are trying to offer the public less costly insurance options.

A group of conservative states is also challenging the law in court, and the Department of Justice, in a surprising and controversial move, is arguing that the law’s protections for pre-existing conditions should be struck down.

Premiums this year are reflecting that uncertainty.

In Maryland, the average proposed increase among insurers and plans was 30 percent. CareFirst BlueCross BlueShield, for example, requested an 18.5 percent hike for its HMO plans and 91.4 percent for its PPO plans.

In Virginia, proposed rate hikes varied widely, from 15 percent to 64 percent. Vermont’s proposed premium increases were more modest.

According to an analysis of 10 states and the District of Columbia by the consulting firm Avalere Health, premiums for the most popular midlevel exchange plans in 2019 will be 15 percent higher on average than 2018 premiums.

“Insurers are starting to gain a better understanding of who is likely to buy their health insurance through the exchanges, but questions about the stability of the market remain,” said Matt Brow, president of Avalere.

Seven states will have more options than in 2018, but overall, the plans will increase from an average of $642 per month to $740 per month.

Democrats have pounced on premium increases ahead of the midterm elections. They believe that with the GOP now in control of government, Trump and congressional Republicans will have to shoulder the blame for the hikes.

Last month, Senate Minority Leader Charles Schumer (D-N.Y.) vowed that Democrats would be “relentless” in attacking the GOP over higher premiums.

Republicans say premiums would have been lower if Democrats had not blocked an ObamaCare stabilization bill in Congress earlier this year over abortion restrictions.

Still, the presence of more choices for customers is not something experts were predicting after last year.

“This time last year … we were in the middle of debate over ACA repeal, Trump was saying he won’t enforce the individual mandate, they were talking about cutting off [cost-sharing reduction] subsidies,” said Sabrina Corlette, a research professor at Georgetown University’s Center on Health Insurance Reforms.

“If you look back to where we were [a year ago], the marketplaces are showing remarkable resilience,” she added.

State insurance commissioners are cautiously optimistic about having more options in their states.

“I think maybe there’s some marked optimism in terms of participation, but colleagues are still seeing significant rate increases across their desks,” said Julie Mix McPeak, Tennessee’s insurance commissioner who serves as the president of the National Association of Insurance Commissioners.

In McPeak’s home state, she’s hopeful that signs are pointing to rates beginning to plateau and that Tennessee won’t see the large hikes of years past.  

“There’s a little more certainty about federal interpretation of the ACA. There seems to be less uncertainty in the regulatory environment,” McPeak said.