The tiny health insurance company holding Obamacare together
The Affordable Care Act’s marketplaces have struggled since their launch to attract a robust set of health plans. Most health plans lost money in the first few years, setting premiums that didn’t nearly cover their patients’ claims.
The uncertainty the Trump administration has created over how they will run health law programs, industry sources say, has made those problems worse — just when some thought the marketplaces were beginning to stabilize.
“The information we’ve seen coming from the administration actually creates more uncertainty rather than creating greater certainty,” says Brad Wilson, chief executive of Blue Cross Blue Shield North Carolina.
Large, publicly traded health plans like Aetna and UnitedHealth began to quit the marketplaces in 2016. Most states, however, had a failsafe option: the local Blue Cross Blue Shield plan.
Many Blues plans are nonprofit. Before the Affordable Care Act, many served as the “provider of last resort” — the insurer that would cover the really sick, really expensive patients that all other health plans had rejected.
As other plans quit, Blue Cross plans became the Affordable Care Act’s backbone. “In almost all parts of the country where there is one insurer left, it’s a Blue Cross Blue Shield plan,” says Cynthia Cox, an associate director at the Kaiser Family Foundation who studies the marketplaces. “These plans just have a strong history serving their community.”
But in the Midwest, Blue Cross plans have begun to abandon the Affordable Care Act marketplaces. Blue Cross Blue Shield of Nebraska stopped selling plans there this year, and Wellmark (Iowa’s Blue Cross plan) will quit the state’s marketplace in 2018.
(Wellmark had never been especially committed to the Obamacare marketplaces, making the state a bit of an outlier. While most Blues plans lined up to sell on the marketplaces in 2014, this for-profit one held off until 2016 to join.)
Blue Cross Blue Shield of Kansas City announced on May 24 that it will not sell coverage on the Obamacare marketplaces next year. The plan has experienced significant losses in recent years and is scared off by the current uncertainty over the health law’s future.
“Like many other health insurers across the country, we have been faced with challenges in this market,” Blue KC chief executive Danette Wilson said in a statement. “Through 2016, we have lost more than $100 million. This is unsustainable for our company. We have a responsibility to our members and the greater community to remain stable and secure, and the uncertain direction of this market is a barrier to our continued participation.”