Obamacare’s exchanges face their moment of truth


Insurers hit a major deadline Wednesday: They must inform regulators in 39 states whether they will sell insurance on many Affordable Care Act marketplaces and, if so, how much they would like to charge.

It’s something of a moment of truth for the Affordable Care Act’s marketplaces, whose health depends in large part on the participation of private insurers. And so far, states are seeing mixed results: One major insurer has made a big pullout, while a different one announced it would expand into new states.

Insurance giant Anthem announced it would leave the marketplaces — also called exchanges — where individuals can use federal subsidies to buy health plans in two states in 2018, Indiana and Wisconsin. Oscar Health, a start-up company that was co-founded by Ivanka Trump’s brother-in-law, announced it would expand in Ohio, New Jersey, Texas, Tennessee, California and New York.

The deadline applies to all 39 states whose marketplaces are run by the federal government. An evolving map by the Kaiser Family Foundation showing which counties are at risk of having no insurance options next year highlights 44 counties in four states, where about 30,000 people buy insurance through the marketplaces.

People who buy individual insurance plans in the marketplaces can take advantage of federal tax credits that are pegged to income and reduce monthly premium payments. To date, there has not been a county with zero insurers selling policies on its marketplaces, and it’s not totally clear what will happen if a county is left without any plans. It’s possible, however, that without a functional exchange, would-be participants would have to shoulder the full costs of their health insurance — or go without.

The future of the marketplaces has become a major political talking point, with the White House declaring the marketplaces a failure. Democrats blame the struggles of the market on Republicans’ failure to offer insurers reasonable clarity about the future. In particular, insurers have complained that decision-making has been difficult without certainty that cost-sharing reduction subsidies, federal payments that help bring down the out-of-pocket costs for lower-income Americans, will be paid next year.

The business of selling health coverage on the Affordable Care Act marketplaces has become “difficult due to a shrinking and deteriorating individual market, as well as continual changes and uncertainty in federal operations, rules and guidance, including cost sharing reduction subsidies and the restoration of taxes on fully insured coverage,” Anthem said in a statement announcing the decision.

Mario Schlosser, chief executive of the start-up Oscar, made the opposite decision to expand its small footprint because of his faith in the long-term business of selling insurance to individuals.

“When the dust settles, there is more work to be done on the regulatory side to make sure it will be stable, but I’m confident we will see a stable market there,” Schlosser said.

MDwise Marketplace, an insurer in Indiana also announced it would leave that state’s exchange. That could put four counties at possible risk of having no insurer next year, according to Kaiser, although that is uncertain because a different insurer, Centene, has announced it is expanding in the state. A spokeswoman for Centene said the company was still working through the filing process and would not share information until it was complete.

Kaiser found counties in Ohio, Missouri and Washington are at risk of having no insurers.

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