The Anthem exit in Ohio is especially worrying, however, given the massive swath of the country in which it is the sole insurer in the exchanges, according to Cynthia Cox, associate director at nonpartisan health policy think tank The Kaiser Family Foundation.”Anthem’s exit from Ohio could be the tip of the iceberg,” Cox told Business Insider on Tuesday. “Their reasons for leaving don’t appear to be specific to Ohio, rather about political and regulatory uncertainty coming from the White House and Congress. If Anthem leaves the market nationally, there could be hundreds of thousands of people without any exchange insurer.” In a statement to Business Insider, Anthem cited a number of uncertainties that could impact the market coming from the Trump administration and Congress. “The individual market remains volatile and the lack of certainty of funding for cost sharing reduction subsidies, the restoration of taxes on fully insured coverage and, an increasing lack of overall predictability simply does not provide a sustainable path forward to provide affordable plan choices for consumers,” said the statement.
Cox raises an excellent point that suggests Anthem’s withdrawal from the Ohio non-group market is less about Ohio than national policy. Anthem is likely firing a shot across the bow of Washington, warning it to quickly provide a degree of certainty going forward — or all bets are off nationwide.
That’s bound to get attention given Anthem’s major presence in the non-group medical insurance market. In late April, Anthem tentatively indicated it would sell coverage in state health benefit exchanges for plan year 2018, but reserved the right to reverse course lacking clear federal policy direction, particularly with regard to reduced cost sharing subsidies offered to low income households and the Affordable Care Act’s tax on health plan issuers.
As some observers have noted, Anthem could simply raise premium rates by 20 percent on its silver level plans to make up for the potential loss of cost sharing reduction subsidies for income qualifying households as Anthem indicated in April. However, that would potentially accelerate adverse selection among households that don’t qualify for significant advance premium tax credits to offset higher premiums, particularly coming after steep increases for 2017 plans.
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