More Health Insurers Could Be Leaving Texas Exchange
The rapid unraveling of health insurance options for Texans continued last week as three more insurers said they are leaving or considering leaving the Affordable Care Act's federal exchange in the state next year.
This comes less than three days after Aetna, one of the nation's largest health insurance companies, announced its exit from the exchange in 11 states, including Texas.
UnitedHealthcare's previous announcement it would not participate in the exchange in 2017 brings the total to at least five.
Last Thursday, the insurance giant Cigna said in an email to the Chronicle it "is in discussions with the Texas Department of Insurance to not participate on the 2017 Texas public marketplace exchange."
Also on Thursday the state insurance department confirmed Humana, another of the nation's largest insurers, had signaled plans to pull out of some Texas counties, including Harris County, next year.
Humana declined to comment, saying it would not "publicly disclose details of its plan offerings for the coming year while they are still under review by regulatory agencies."
Meanwhile, Scott & White, a major regional insurer in Texas, announced on its website Wednesday it, too, is pulling out of the exchange next year.
All of the insurers have cited heavy losses in the plans as the primary reason for leaving the federal exchange, which for 2016 signed up a record 1.3 million Texans. By comparison, roughly 12.6 million Texans were insured through an employer-sponsored plan, according to 2014 figures compiled by the Kaiser Family Foundation.
The insurance industry for months has telegraphed its unhappiness with how the Affordable Care Act has unfolded, threatening to abandon the exchanges or significantly raise rates to compensate for the financial hits taken from covering people sicker or using more health care than first anticipated.
Blue Cross and Blue Shield of Texas, the only carrier in all Texas counties, has asked for a nearly 60 percent rate increase in some of its exchange plans for 2017. A Texas Department of Insurance spokeswoman said that request is still pending.
There appears little doubt that the coming year is shaping up to be a painful one for insurance consumers.
Jason Bohmann, a Houston insurance broker, on Thursday cautioned that "2017 is the year that it completely blows up."
"It might not have been a surprise to see a random national carrier leave, but it is a surprise to see so many departing at once," agreed Michael Morrisey, a professor and head of the health policy and management department at the Texas A&M University School of Public Health.
He speculated there could be the domino effect of adverse selection, where, as one insurer no longer covers heavy users of health care, other insurers fear they will be saddled with picking up the risk, so they leave, too.
The exchange opens for enrollment Nov. 1. Insurance companies have until Sept. 23 to inform the federal government if they will participate.
Scott & White, which does not offer plans in Houston but has a large presence in the smaller towns and rural areas of the state, will continue to offer some individual and family bronze health maintenance organization, or HMO, plans off the exchange, the company said last week.
That means customers can buy the plans either directly from the insurer or through a broker. The company will also offer a bronze preferred provider organization, or PPO, plan option also off-exchange.
"Scott & White Health Plan is committed to offering affordable, quality health insurance options in Texas," Scott & White Health Plan CEO Jeff Ingrum said by email. "We regret that in 2017, we will be unable to offer plans through the Health Insurance Marketplace. We will continue to assess our ability to participate in the future, as this is a changing environment."
By not participating in the exchange, customers will not be eligible for the federal subsidies that lower premium prices.
Cigna, too, in its email last Thursday said it intends to "continue to offer individual and family plans off-exchange, and to be a leading provider of employer-sponsored health plans in the state of Texas."
The Texas Department of Insurance said it is unclear what plans Humana will offer. Humana submitted rate requests for its ACA plans, but it didn't include rates for Harris or several other counties where it currently offers coverage through the exchange. While the company could still submit rates for those counties, it appears Humana intends to narrow its offerings, the insurance department said.
Some policy watchers are especially concerned about the lack of competition taking shape in Texas. Consumer choice and competition were pillars of the Affordable Care Act to keep prices down.
Blue Cross and Blue Shield already is the only insurer on the exchange in roughly 1 in 5 of Texas counties. That number should rise as other carriers drop out.
"In many places in Texas people have one insurance choice and it's an expensive one," said Gary Claxton, vice president of the Kaiser Family Foundation.
As other insurers leave the exchange, Morrisey said, consumers could be left with only three choices: pay the high premiums, become uninsured and pay the mandatory penalty, or buy short-term policies that might cover treatments but are not eligible under the health care law so those people would also have to pay the penalty.
Morrisey is especially troubled by the exit of Scott & White.
"This is an organization that understands HMOs in Texas," he said. "The fact that they are saying they can't make money on the exchange says something about the nature of who is enrolling in the exchange plans."
Still, during these turbulent times all may not be as it seems.
Aetna said Monday night it was leaving the exchange because of losses, but the Huffington Post reported soon after that the company's CEO had previously threatened to leave the exchange if the U.S. Department of Justice tried to thwart its controversial merger with Humana.
Opponents of the health care law say the departure of major insurers from the exchange is proof the ACA is failing. Yet at the same time, the U.S. Department of Health and Human Services points to the success of enrolling nearly 20 million people in health insurance in the past three years and reducing the uninsured rate.
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