Anthem is leaving the Affordable Care Act marketplace in Maine for one major reason: Uncertainty.
If the company doesn’t know how many people will be in a market and what its rules will be, it is very difficult to set the rates it will charge its customers.
The uncertainty around the ACA comes not from the law itself — as Republicans, including Gov. Paul LePage and Rep. Bruce Poliquin, would like us to believe — but from Republicans’ repeated efforts to repeal and replace it and, short of accomplishing that, to undermine it.
In a June report, the federal Centers for Medicare and Medicaid Services, or CMS, concluded that the elements included in the ACA to mitigate risks for health insurers are working as intended and that the individual market is stable.
Yet, Republicans continued to work to repeal the law. The latest GOP effort, the Graham-Cassidy bill, failed to gain enough support to be brought to a Senate vote, thanks to Sen. Susan Collins’ consistent and principled opposition. She has long been concerned that the various repeal-and-replace bills would leave more Mainers, especially those with pre-existing health conditions, without insurance, raise costs for those with insurance and harm Maine’s hospitals by dramatically reducing federal Medicaid spending. Her concerns have been bolstered, repeatedly, by analysis by the nonpartisan Congressional Budget Office and affirmed by the hundreds of organizations that opposed the measure. Those organizations included the American Medical Association and America’s Health Insurance Plans, a trade group that represents Anthem, which told Congress this week that Graham-Cassidy would have “negative consequences on consumers and patients by further destabilizing the individual market.”
Republicans tried to bury these problems by rushing bills to floor votes without relevant committee hearings where experts could testify and be questioned. Debate and amendments were also severely limited.
Despite the failure of repeal legislation, the Trump administration is weakening the ACA through other means.
It has cut the annual enrollment period in half, and it will shut down the online enrollment system several times during that period for lengthy stretches. It has also slashed spending by 72 percent on advertising to encourage enrollment in the ACA marketplace and on navigators who help people sign up for plans.
These actions work against people buying insurance through the marketplaces, leaving in the insurance pool sicker people whose health care needs are more expensive to cover. A lack of balance results in higher costs for insurance companies, which then raise their premiums.
The reality of the ACA marketplaces does not matter to critics of the act. They wrongly blame the act for being a failure when it is their continued attacks on the health insurance law that are causing the uncertainty that is driving companies from the ACA marketplaces and is a large factor in rising health insurance costs.
“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.” Colin Manning, a regional spokesman for Anthem, said to explain why the company would stop selling insurance in Maine’s ACA marketplace.
Translation, with fewer people in the market, it is harder to spread risk — and costs — to enough policyholders to make the finances work. Second, without “a known set of conditions” — i.e. will the federal government continue to fund subsidies? Will the individual mandate be enforced? Will cost-sharing payments continue? — companies like Anthem have a hard time knowing what to charge for insurance policies for the upcoming year. Insurers have so far lacked that “known set of conditions” for the entire presidency of Donald Trump. The prudent business decision is to charge more, sometimes a lot more, or withdraw from the market.
“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 on Thursday. Harvard Pilgrim and Community Health Options plan to stay in Maine’s individual marketplace for 2018, although both will significantly raise rates.
If LePage and Poliquin are truly concerned about rising insurance rates and companies leaving the ACA marketplace, they should encourage bipartisan efforts to improve and stabilize the Affordable Care Act. The Senate Health, Education, Labor and Pensions Committee — of which Collins is a member — has asked state insurance commissioners, governors and health care providers for their ideas.
Complaining and pointing fingers is easy — but it gets individual insurance markets across the country no closer to stability.