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Anthem’s exit from Ohio non-group is a shot across the bow of official Washington

June 7th, 2017 Comments off

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.

Source: Anthem Obamacare exchange exit from Ohio – Business Insider

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.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Numerous tweaks to ACA’s health insurance reforms add to law’s complexity

December 21st, 2015 Comments off

Most everyone would agree the Patient Protection and Affordable Care Act’s health insurance market reforms are complex. Adding to the complexity is their staggered, stop and go implementation as Congress and the administration apply various changes and adjustments. It also demonstrates the iterative nature of the law that continues to evolve nearly six years after it was enacted in March 2010.

The most recent addition comes in the federal budget measure signed into law late last week to fund the federal government though the end of the current fiscal year ending next fall. The measure suspends for 2017 the health insurance provider fee levied on health insurers under Section 9010 of the statute. It also pushes out the effective date of the 40 percent excise tax on high cost employer-sponsored group health plans – known as the “Cadillac tax” – to apply to plans effective in 2020 versus 2018 and makes the tax deductible. That gives unions and state and local governments that offer relatively generous plans and most likely to feel the effects of the tax more time to determine their compliance or avoidance strategies. The bill also requires a review of the suitability of indexing the tax adjustment amount to the Blue Cross/Blue Shield standard benefit option of the Federal Employees Health Benefits Plan.

The budget bill also extends a pre-existing budget provision barring the administration from allocating funds to bail out one of the Affordable Care Act’s premium stabilization programs designed to minimize premium volatility for plans sold on state health benefit exchanges. The risk corridors program levels loss experience among health plan issuers so that issuers with lower than expected claims make payments to issuers with higher than expected claims. Problem is, as this Milliman analysis explains, the playing field isn’t level. That’s because of a tweak applied in late 2013 delaying another provision of the Affordable Care Act under transitional regulatory relief. It authorized states to temporarily allow individual and small group plans to offer coverage not compliant with minimum benefit designs mandated by the law – which some states opted to do. That in turn affected claims experience among health plans, throwing the risk corridors mathematics out of whack and substantially shorting plan issuers expecting risk corridor payments. The one year suspension of the fee assessed on health plans offers plan issuers suffering higher than expected claims costs on plans written in 2014 through 2016 some offsetting financial relief before the risk corridors and reinsurance premium stabilization programs expire in 2017.

Last week’s budget bill is the third legislatively enacted change to the Affordable Care Act’s insurance market reforms in 2015. It closely follows another that allows states to elect to define their small group health insurance markets as those serving employers with 50 or fewer employees rather than 100 beginning in 2016 as the law originally required as well as the repeal of ACA Section 1511 in November’s Bipartisan Budget Act of 2015. Section 1511 requires large employers of more than 200 full time employees to automatically enroll new full time employees in one of the employer’s health plans.

(This updated version corrects and expands on a previous version of this post that incorrectly referenced ACA Section 4375)

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

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