Anthem threatens to leave additional Obamacare markets if cost-sharing payments are cut

Anthem insurance is one of the few big players remaining in the Obamacare marketplaces. On a conference call Wednesday, CEO Joseph Swedish said the company was waiting to see whether or not cost-sharing subsidies were going to continue under the Trump administration. If they do not, he warned, his company would have to reconsider where it was offering plans. From Forbes:

If Congress doesn’t move to fund such subsidies low-income Americans who buy Obamacare use to pay their out-of-pocket costs, Anthem CEO Joe Swedish said the insurer may “further narrow our participation” on the ACA’s public exchanges. That means Anthem, which sells Blue Cross and Blue Shield brand individual coverage on exchange in 14 states, could leave additional states.

From Bloomberg, Swedish emphasized a decision about continued participation would have to be made soon:

“Some of our critical decisions will have to occur in a relatively short period of time,” he said on a conference call. “Time is of the essence for us to make the right decisions for the markets we serve, the membership we serve, as well as with the company overall.”

The decision will be based on whether or not the Trump administration continues to make cost-sharing payments to insurers. The GOP won a court case last year which would end the payments. However, the Obama administration had been appealing that decision. With the election of President Trump, the appeal could be dropped at any time, putting an end to the payments unless Congress passes a new law authorizing them.

In May there were reports that Trump was leaning toward cutting off the payments, i.e. dropping the appeal. But the administration wound up asking the court for a 90-day extension. This was a way of kicking the can down the road. Trump would have more time to decide what to do. But that time will expire in about a month. And even before that, the deadline for insurers to change their service area is in early August. So a decision about where to sell plans in each state will need to be made soon.

Anthem has already pulled out of three states. In June the company announced it would leave the Ohio market. Later the same month Anthem also pulled out of Indiana and Wisconsin as well.

President Trump said last week that if the GOP repeal and replace effort stalled another option was to “let Obamacare fail.” The announcement today by Anthem suggests all he would need to do for that to happen would be announce he is cutting off cost-sharing payments.