Teresa McUsic

Local consumers left with few options on Obamacare exchange

Blue Cross Blue Shield of Texas will be the sole player in the ACA marketplace, where consumers can get policies with federal subsidies, in Tarrant County in 2017.
Blue Cross Blue Shield of Texas will be the sole player in the ACA marketplace, where consumers can get policies with federal subsidies, in Tarrant County in 2017. AP

And then there was one.

After three years of growth, which culminated in six health insurers offering 63 plans last year, the Affordable Care Act marketplace likely will fall to just one insurer for Tarrant County residents in 2017.

Blue Cross Blue Shield of Texas will be the sole player in the ACA marketplace here, making Tarrant County the largest metro area in the state down to one participant.

Four of the previous insurers in the county — Aetna, Scott & White, Cigna and UnitedHealth — each confirmed they have pulled out of the ACA marketplace throughout the state.

Some will offer off-market individual policies locally, but those policies will be sold without the lucrative federal subsidies offered through the federal exchange to offset the cost of monthly premiums and other costs.

Oscar, which just entered the ACA market last year, will still be in the San Antonio marketplace but pulled out of DFW, except with off-market policies.

In addition, Blue Cross plans to significantly raise its 2017 premiums in Texas for ACA policies an average of 58 percent, according to a filing at Healthcare.gov.

The April filing said the rate hikes would affect approximately 535,000 customers and are based on a $770 million loss in 2015 as a result of $4 billion in claims supported by $3.2 billion in premiums. Other insurers in the marketplace also have indicated losses.

“The main driver of the increase in the proposed rates is that the actual claims experience of the members in these individual ACA metallic policies was significantly higher than expected,” the filing states. “The 2017 filed rates reflect our updated expectations around anticipated medical costs.”

However, Blue Cross, which will remain the sole insurer in more than a third of Texas counties, said final decisions have not been reached on its 2017 marketplace policies.

“It’s important to note that no final decisions have been made regarding our 2017 offerings,” Gustavo Bujanda, spokesman for Blue Cross Blue Shield of Texas, said in an email.

“We have been in this market for 80 years and are working towards continuing to provide health insurance options for Texas consumers. However, that must be done in a sustainable way. Premium rates must cover the anticipated health care needs of our members and consumer protections exist in the way of rebates if a certain percentage of premiums do not go directly to covering medical services and quality programs.”

This week, new census data showed that the ACA marketplace has helped reduce the number of uninsured in Texas from 5.7 million in 2013 (22 percent of the population) to 4.6 million in 2015 (17.1 percent). The state still has the largest number of uninsured people in the country, however.

Having just one insurance company to choose on the exchange will limit medical options, said Stacey Pogue, senior policy analyst for the Center for Public Policy Priorities.

“If they care about a particular doctor — a cardiologist or neurologist they use—and they are not in network, they can’t go to the competition for an alternative anymore,” she said. “The same thing is true if they have certain drugs that are not in the Blue Cross formulary.”

The presumed cost increase on Blue Cross policies will not affect most customers, however, because the subsidies will cover that increase, Pogue said. The limited health plan options will not allow customers to price shop among competitors, however, she added.

“Most people on the exchange have subsidies — 84 percent in Texas — and are largely shielded from rate increases,” she said. “The people who will feel the rate increase are the ones who pay full cost or who have a small subsidy.”

The federal health exchange subsidies are based on income. To earn the full subsidy, marketplace customers much earn below 250 percent of the poverty level.

The diminishing choices come as IRS penalties for not being insured have reached their highest level. This year and beyond, the penalty for being uninsured is 2.5 percent of total household adjusted gross income, or $695 per adult and $347.50 per child, whichever is greater, for a maximum penalty of $2,085. The flat fee will be adjusted for inflation starting in 2017.

Scott and White, which announced the change on its website, said it also experienced higher use of its ACA plans than premiums could support.

“Like many other health insurers, we have determined that we cannot currently serve marketplace plans on an effective and financially sustainable basis,” the insurer said. It will continue off-marketplace plans at the bronze level [lowest level] of coverage. Silver and gold plans will not be available.

Cigna also will continue to offer individual plans off the marketplace, according to spokesman Joe Mondy.

“The decision was a hard one for us because it means that our current exchange customers in Texas will have to seek other options for 2017,” Mondy said in an email. “This decision is based on where we can provide customers with access to the best combination of affordability, quality and overall value. And we continue to seek to define the most appropriate products that provide this combination and that are competitive in the public marketplace.

Aetna announced earlier this month it will drop out of exchanges in 11 states, including Texas, and remain in four. UnitedHealth announced in April that it will be leaving the ACA marketplace in 16 states, citing a loss of $650 million in ACA plans this year.

While Oscar is withdrawing from the DFW and New Jersey markets next year, it will continue in San Antonio, New York, Los Angeles and Orange County, Calif., and begin serving San Francisco. The company cited “uncertainties” in the DFW and New Jersey markets that made it a challenge to continue, but it hopes to return in the future.

“They all left their foot in the door,” Pogue said. “They are selling off the exchange with ACA compliant policies and could return if they think their risks are mediated.”

A larger portion of Texas will only have one choice compared to the nation next year, although the number of insurers is shrinking nationally as well. The Kaiser Family Foundation estimate that 62 percent of enrollees in 2017 nationwide will have a choice of three or more insurers, compared to 85 percent of enrollees in 2016.

Teresa McUsic’s column appears Saturdays. TMcUsic@SavvyConsumer.net