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States to Health Insurers: Please Come Back

The Wall Street Journal. logo The Wall Street Journal. 7/14/2017 Anna Wilde Mathews

Nevada officials were stunned last month to learn consumers in most of the state might have no way to get health plans under the Affordable Care Act, because insurers were pulling back from the insurance marketplace.

“It felt like a gut punch,” says Heather Korbulic, executive director of Nevada’s insurance exchange, where consumers buy ACA coverage online. When she learned of the situation from insurer filings, she says, she blurted out loud: “Holy sh--, what are we going to do?” Nevada officials quickly began pushing to solve the problem.

As some insurers announce plans to pull back or exit insurance exchanges, and others seek major rate increases for next year, states are trying to hold together fraying individual insurance markets. State officials say they are caught between insurers nervous that they will face losses on their exchange business and uncertainty at the federal level as Republicans’ efforts to pass a major health overhaul bill drag on.

“There is a general feeling that we’re on the front lines,” says Julie Mix McPeak, Tennessee’s insurance commissioner.

She worked to convince BlueCross BlueShield of Tennessee to offer plans next year in 16 counties that were at risk of lacking exchange coverage after Humana Inc. announced it would leave. The Tennessee insurer has requested a 21% rate increase, which it said was almost all tied to worries that federal officials won’t enforce the ACA’s mandate for insurance coverage and will stop making key payments that help reduce low-income enrollees’ health costs.

Officials in Missouri and Washington have landed insurers to fill blank spots on their marketplace maps. But other states confront potentially empty counties, with 20 in Ohio, four in Indiana and 14 in Nevada at risk of lacking exchange plans next year, according to the Kaiser Family Foundation.

Insurers’ pullbacks have sent state officials scrambling to woo, pressure and cajole reluctant companies, with rounds of phone calls and meetings. At least one state, aiming to ensure coverage, has gone further: In New York, officials have said that to participate in Medicaid contracts, insurers must offer exchange plans in the state.

In Iowa, which has one insurer currently enlisted to offer exchange plans statewide next year, officials are pushing for federal approval of an emergency proposal to rework many of the ACA’s rules in the state. Alaska recently won a federal waiver for its effort to bolster its exchange, a reinsurance program to blunt insurers’ costs for unhealthy enrollees.

Several other states are eyeing similar requests. “We’re going to make this work,” says Mike Kreidler, Washington state’s insurance commissioner, who said he is working on potential proposals.

Randy Pate, a deputy administrator at the Centers for Medicare and Medicaid Services, said in a statement the agency “continues to work with state departments of insurance and issuers to address bare counties, exploring all options available under current law.”

An agency spokeswoman said the ACA “was failing well before President Trump took office” and the Trump administration “is still considering its options” about the cost-sharing payments, which she said could be resolved if Congress passed a health bill.

A recent Kaiser Family Foundation analysis found insurers’ financial results on exchange plans improved in the first quarter of this year, a sign of potentially emerging stability.

In Nevada, state leaders say they are mounting a full-court press to rescue their marketplace—and are hopeful that at least one insurer is going to sell exchange plans in the 14 counties that are at risk of lacking coverage, which include large rural swaths as well as the capital, Carson City.

Three insurers have signaled they may agree to provide plans in the endangered counties next year, said Mike Willden, chief of staff for Nevada Governor Brian Sandoval. “We’ve entered into discussions with three carriers, and they’ve indicated they’re looking at it,” he said. “I’m under the impression there will be one or more that propose” to enter the bare counties.

A Centene Corp. spokeswoman didn’t comment. UnitedHealth Group Inc. said it plans to offer exchange products in the same counties where it currently sells them and “will work with the governor’s office on how best to address the individual exchange coverage needs of residents in other areas in the state.” Anthem Inc. declined to comment. Anthem currently offers exchange plans throughout the state but has said it will pull back to just three counties next year, citing federal uncertainty among other factors.

Aetna Inc., which had filed to offer exchange plans in a limited region of Nevada next year, said it now won’t do so. Aetna’s move to enter the exchange was tied to a Medicaid contract it won in the state, which an Aetna spokesman said it now plans to terminate because enrollment is too low to “support a sustainable business.”

Without exchange plans, consumers like Tom Jones could be stranded without coverage. Mr. Jones is a 54-year-old florist in Carson City who pays about $100 a month for his Anthem exchange plan. A federal subsidy covers the rest of his premium, which is around $574 in total. Under the ACA, the subsidy is available only for plans bought through an exchange. Mr. Jones says that without the federal help, “there’s no way I could afford it, none whatsoever. … It’s a huge worry.”

Ms. Korbulic, the head of Nevada’s exchange, says her agency has been getting worried calls from consumers, and she has been meeting with concerned hospital executives, as well as insurance agents and state legislators. One health-care provider asked what to do for a pregnant patient with an exchange plan who lives in one of the counties currently at risk of having no exchange coverage. The patient’s baby is due next January, after her current insurance runs out. Ms. Korbulic says she warned that the woman might be stuck simply showing up at an emergency room when she goes into labor, if no insurance plan is available.

Nevada officials say Gov. Sandoval has been deeply involved in efforts to resolve the bare-counties issue, calling on federal officials including Tom Price, secretary of Health and Human Services. Mr. Sandoval also has met with insurers and called company CEOs, Mr. Willden said, with the message that “it’s unacceptable that we have bare counties” and they should “find a way to make an offer.”

In letters to the insurers, the governor said, “Please understand in no uncertain terms the confidence, faith, and importance that I am placing in your ability to find either a collective, or individual, solution” to the problem.

Still, state officials said, there are limits to what they can do, as some of the biggest questions bothering insurers are at the federal level.

“It’s frustrating because so many things are out of our control,” said Barbara Richardson, Nevada’s insurance commissioner, who along with the governor’s office and exchange officials has been spearheading efforts to respond to the lack of marketplace plans. “You’re dealing with trying to solve problems you don’t have any power to do anything about.

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