Thursday, March 30, 2017

Is Anthem Exiting the Obamacare Exchanges? The Trump Administration Needs to Decide if They Are In or Out

Bloomberg is out with a report that Anthem may exit most of their Obamacare exchange markets next year:
Anthem, Inc. is likely to pull back from Obamacare’s individual insurance markets in a big way for next year, according to a report from analysts who said they met with the company, a move that could limit coverage options for consumers at a politically crucial time for the law.
Anthem “is leaning toward exiting a high percentage of the 144 rating regions in which it currently participates,” Jefferies analysts David Windley and David Styblo said Thursday in a research note.
An exit by Anthem might be devastating to insurance markets created by the Affordable Care Act, which is often called Obamacare. The company, which sells coverage under the Blue Cross and Blue Shield brand in 14 states, is one of the few big insurers that has stuck with the ACA. UnitedHealth Group Inc. and Aetna Inc. have already exited most states, and Humana Inc. is planning to stop offering individual ACA plans entirely for 2018.
If Anthem quits, consumers in parts of Colorado, Kentucky, Missouri and Ohio would be at risk of having no Obamacare insurers for next year, according to an analysis from Axios, a news website. Humana’s exit, similarly, will leave parts of Tennessee with no ACA insurance options, though state officials have said they’re working to attract other insurers.
Will Anthem, part of the Blue Cross Blue Shield exchange market backbone left in most of the states, really exit? Or, is this just a negotiating ploy just as the Trump administration is about to make key decisions regarding the Obamacare exchange market for 2018?

I have my doubts that Anthem will end up exiting the Obamacare exchanges. While Anthem is a publicly traded company, its legacy Blue Cross plans in the 14 states in which it participates have a long tradition of being a community partner.

But this news is important.

First, so much for all of those who continue to argue the Obamacare insurance exchanges are largely stable.

Second, this news begs the key question: President Trump, are you in or out?

Can you imagine real estate developer Donald Trump going to a potential real estate partner and saying: "Invest in my project. I think it is in the process of blowing up. But, please participate."

President Trump and his administration apparently believe that if Obamacare does blow up, their fingerprints won't be on it.

The President is right about this; the Obamacare insurance exchanges were not stable and healthy the day before the election. But he and his administration have done nothing but throw gasoline on the fire since they came to power.

Right now, there are two key questions the Trump administration has to answer:
  1. Will they pull the plug on the low-income cost sharing subsidies? If they do, the cost to the health plans would be about $8 million a month for every 100,000 people with cost sharing they cover.
  2. Are they going to enforce the individual mandate or not? So far, they have told the IRS to continue processing returns when the filer doesn't state their insurance status. Sort of, don't ask don't tell! The individual mandate was never terribly effective, but it did get people's attention. Putting the word out that you don't have to sign up until you are sick would about finish things off.
Yesterday, in Congressional testimony, HHS Secretary Price was asked about both of these things and he dodged on both.

President Trump, are you in or out?

The health plans have to make their decision in the next very few weeks and they need to know.

Which begs another question for the President: If you can't repeal and replace this with something better, what choice do you have but to make every effort to make Obamacare work as best you can?

Here's some unsolicited free advice.

A Republican agreement to fix this aside, if I were you, I would do everything from a regulatory perspective Nancy Pelosi is telling you to do to support the exchange markets. In fact, invite her in to give you the list. There aren't enough regulatory opportunities to fix this anyway. Having done that, how could the Democrats then argue a blowup was your fault?

Unless of course you don't think it's blowing up on its own.

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