Anthem pulls out of Ohio exchange in 2018

Anthem announced Tuesday that it will be leaving the Ohio Obamacare exchange next year. The decision by Anthem could leave 20 of Ohio’s 88 counties with no option for Obamacare plans, i.e. assuming no alternate insurers steps in. According to Reuters, “the move would leave about 10,500 people in at least 18 counties with no insurer.” The company gave a statement on the decision to Business Insider:

We are pleased that some steps have been taken to address the long term challenges all health plans serving the individual market are facing, such as improving the eligibility requirements that allow consumers to purchase a plan outside of open enrollment and improved risk adjustment. However, the Individual market remains volatile and the lack of certainty of funding for cost sharing reduction subsidies, the restoration of taxes on fully insured coverage and, an increasing lack of overall predictability simply does not provide a sustainable path forward to provide affordable plan choices for consumers.

Other insurers who have left the markets in various states have offered similar explanations. Many of the insurers have been losing money in the exchanges and the possibility that cost-sharing payments, which are made to insurers by the government, could be cut off is a serious concern. The GOP challenged the cost-sharing payments in court last year and won. The Obama administration was appealing that decision but with Trump’s election, a decision on the case is in limbo. If the Trump DOJ drops the appeal then the payments, which total several billion dollars a year, would be cut off. However, insurers are required to offer the benefits to their customers whether or not they are being reimbursed for the cost.

Anthem’s announcement doesn’t come as a complete surprise. Last month, CEO Joseph Swedish said the company was talking to regulators in all 14 states about where it would remain in the market and where it might remove itself. “We would prefer not to extract ourselves if we can get the math to work,” Swedish said at the time.

Other states are clearly concerned about the possibility that Anthem could exit. New York announced Monday that any insurer that leaves the exchanges will be prohibited from participating in all other state insurance business. From Bloomberg:

Insurers that exit Obamacare’s individual market would be cut off from government business including Medicaid, the children’s health insurance program and the Essential Plan, which offers cheap coverage to some low-income people who don’t qualify for other programs, according to a statement from the governor’s office…

About 242,000 people enrolled in individual health plans through the state’s exchange, while 665,000 picked Essential Plans. More than 6 million people are enrolled in Medicaid, the program for the poor, and a related children’s health insurance program in New York, according to federal data.

Leslie Moran, senior vice president of the New York Health Plan Association, questions whether New York can really cut off insurers who leave the exchange. She tells Bloomberg, “We’re not sure that they can legally just say we won’t contract, because there are already contracts in place.”

Anthem is far from the first insurer to announce plans to pull out of the exchanges next year. Blue Cross Blue Shield of Kansas City announced it would drop out of the Kansas market last month. BridgeSpan, an insurer in Idaho dropped out of that state’s exchange. Aetna pulled out of the Virginia and Iowa exchanges and Wellmark Blue Cross & Blue Shield also pulled out of the Iowa exchange in April.