Anthem will not sell plans through the Affordable Care Act marketplace in Maine next year, the company announced Wednesday, the deadline for health insurers to decide where to offer coverage under the embattled law.
In retreating from the market in Maine, Anthem leaves just two insurers selling plans through the ACA marketplace. The company cited a “shrinking and deteriorating” customer base and uncertainty at the federal level over the fate of former President Barack Obama’s signature health reform law.
Anthem had previously announced intentions to withdraw or scale back its ACA offerings in several other states, including Nevada and Indiana.
Anthem was one of three insurers that previously sold coverage in Maine through Healthcare.gov, the Affordable Care Act marketplace, or “exchange.” The other two — Community Health Options and Harvard Pilgrim — confirmed they plan to remain in the marketplace in 2018.
Roughly 80,000 Maine residents purchased health insurance last year through Healthcare.gov. They are part of the “individual market,” or those who buy health insurance themselves rather than getting coverage through work or government programs such as Medicaid.
Anthem serves about 29,000 people in Maine’s individual market.
Anthem and the other insurers stated in earlier regulatory filings that they expect Maine’s individual market to dwindle while growing more expensive to cover. With the Trump administration signaling that it won’t enforce Obamacare penalties for failing to buy insurance, healthy people are already beginning to skip coverage, they stated. That’s expected to leave primarily sicker, older people who most need insurance as customers in the Obamacare market.
In announcing its decision, Anthem noted the uncertainty surrounding a federal tax on health insurers and subsidies that help consumers afford coverage.
About half of Maine residents insured under Obamacare relied on the subsidies in 2017.
The subsidies help low-income enrollees afford out-of-pocket costs such as deductibles and copays. Insurers cover the expense of the subsidies up front, with the understanding that the federal government will reimburse them.
But the future of those payments remains up in the air, due to a lawsuit filed by the U.S. House of Representatives and congressional Republicans’ repeated but so far unsuccessful efforts to repeal Obamacare.
“While we are pleased that some steps have been taken to address the long-term challenges all health plans serving the individual market are facing, the market remains volatile,” Colin Manning, a regional spokesman for Anthem, said. “A stable insurance market is dependent on products that create value for consumers through the broad spreading of risk and a known set of conditions upon which rates can be developed.”
Anthem will sell only one plan in Maine’s individual market next year, outside of the Obamacare marketplace. The plan is categorized as a “gold” policy under the ACA, generally providing generous coverage but with higher premiums. That plan will be available only in Aroostook, Hancock and Washington counties, the company said.
Existing customers who purchased Anthem plans through the exchange can renew their current plans in 2018 but only off the exchange, the company said. That means those customers will not receive the federal subsidies next year, even if the government continues to fund them, or tax credits that offset monthly premium costs.
In the wake of Anthem’s announcement, Maine Insurance Superintendent Eric Cioppa urged consumers in the individual market to compare their options before the open enrollment period, which begins Nov. 1, ends on Dec. 15.
“As most people are well aware, there has been quite a bit of turmoil in the insurance market this year. This has resulted in higher rates, and also in fewer choices,” Cioppa said.
The subsidies for out-of-pocket costs, known as “cost-sharing reductions” are attached to silver level plans under the ACA, Cioppa noted, which are among the more popular plans.
“The important thing for consumers to know is that because the CSR program has not been funded, silver plans might no longer be the best choice for many consumers, particularly those who are not eligible for CSRs,” Cioppa said.
Earlier this summer, Anthem and the other two insurers informed state regulators how much they planned to charge for ACA plans in 2018. All sought double-digit rate increases, calculated on the assumptions that the federal subsidy payments would continue and that the insurers would participate in the market next year.
Anthem proposed raising monthly premiums by 21.2 percent on average. Cioppa approved a lower increase of 18.8 percent.
Cioppa then asked the insurers to submit a second set of rates that assumed the subsidy payments would be eliminated. Anthem indicated it could leave the ACA market in Maine under those conditions.
“As the marketplace continues to evolve and adjust to changing regulatory requirements and marketplace conditions, we will reevaluate whether a more robust presence in the exchange is appropriate in the future,” Manning said Wednesday.
Community Health Options, a Lewiston health insurance “cooperative” created under the ACA and run by members, plans to increase rates by nearly 16 percent on average next year. Some customers will see increases as low as 6 percent, while rates for others will spike by about 50 percent.
Harvard Pilgrim plans to increase rates by nearly 40 percent.
“Current uncertainty in the market makes it difficult for us and other health insurers to plan constructively for the future, and indecision about subsidies for low-income individuals has further complicated matters,” Harvard Pilgrim Vice President Edward Kane said in a statement. “However, continuing to offer high-quality, high-value health insurance options that meet the varying needs of Maine residents is consistent with our mission and values.”
While many will likely blame Anthem for abandoning the market in Maine, the insurer is reacting to uncertainties created by the Trump administration’s “deliberate sabotage of ACA implementation,” said Mitchell Stein, an independent health policy consultant.
In addition to the unpredictability of the subsidies and requirement that everyone buy insurance, the administration also shortened the open enrollment period to sign up for ACA plans, scheduled Healthcare.gov to be offline for 12 hours of nearly every week of open enrollment, and slashed funding for advertising and navigators who assist consumers, he said.
“These all assure that enrollment for 2018 will be lower than it is in 2017,” Stein said.