Healthcare

Large insurer says it might drop ObamaCare in 2018

Blue Cross Blue Shield of Arizona

Insurance company Anthem on Wednesday said it could pull back on its participation in ObamaCare in 2018 if changes are not made to make the market more sustainable. 

{mosads}Other large insurers, such as Aetna, UnitedHealthcare and Humana, have already pulled back, citing financial losses on the ObamaCare marketplaces from a smaller and sicker group of enrollees than expected. 

In 2018, Anthem says it could join its rivals. Like the others, Anthem could drop off in some areas while staying in others.  

“We believe that we must see adjustments such that we can easily map to a 2018 situation of sustainability in this marketplace, and quite frankly given what may or may not happen, we’ll be evaluating the regional engagement across our markets moving into 2018,” Anthem CEO Joe Swedish said on an earnings call. 

He said the company will be looking for a range of changes, such as repeal or delay of the health insurance tax, tightening up the rules for extra sign-up periods that insurers say sick people use to game the system, and changes to a program called risk adjustment, which shifts money to insurers with higher costs. 

While some of those changes require Congress, the Obama administration has already been taking some steps to improve the situation on risk adjustment and the extra sign-up periods, but insurers say they have not gone far enough. 

Republicans have been seizing on higher premium increases for 2017, which are partially due to the fact that insurers are losing money and need to raise their prices. 

Democrats are hoping that Republicans will join them in making fixes to the law next year, but Republicans so far are saying the law simply needs to be repealed. 

Republicans, for example, have derided programs similar to risk adjustment as “bailouts” of insurers. 

Defenders of ObamaCare have argued that more local insurers have a better sense of how to handle the often sick and low-income ObamaCare market than big national insurers. 

The Department of Health and Human Services points out that other insurers have expressed commitment to the ObamaCare marketplaces. It says this year is a “transition period” where premiums, which started out below expectations, are rising back up, and future years will be less tumultuous.   

Still, Anthem pulling back would be another blow to the law and could further reduce competition among insurers. 

This post was updated at 11:46 a.m.

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