- The Washington Times - Wednesday, August 23, 2017

Enticed by local monopolies and leverage to charge high rates, a crop of insurers has stepped in and all but erased Obamacare’s “bare county” crisis heading into 2018, allowing state regulators to breathe a little easier ahead of a sign-up season that will still be marked by uncertainty and scarce choices.

As it stands, customers in every U.S. county except one — Paulding County in Ohio — will have at least one insurer on their web-based exchanges set up by the 2010 Affordable Care Act.

It’s a stark turnaround from earlier this year, when nearly seven dozen counties covering over 90,000 people had at some point faced the prospect of having zero options next year, fueling President Trump’s claim the law was “imploding” and needed to be replaced.

“The exchange markets have proven to be much more resilient than many would have thought. These markets got off to a rocky start and have certainly had challenges along the way, but they aren’t collapsing,” said Cynthia Cox, an associate director at the nonpartisan Kaiser Family Foundation.

Centene Corp. made the biggest splash among insurers who swooped in, opting to fill about half of the counties that clamored for at least one option.

The company has experience in the Medicaid managed-care market, one that — like Obamacare’s exchanges — is marked by low-income customers who frequently churn in and out of the marketplace.

“They think they can actually manage this population,” said Chris Sloan, a senior manager at Avalere, a Washington, D.C.-based health consultancy. “Aetna and others have looked at these places and said, ‘We can’t make a profit here.’”

Centene Chairman and CEO Michael Neidorff recently told CNBC that his company uses its networks to make sure sick customers “get to the doctor” before their problems turn into costly ones.

Likewise CareSource, a nonprofit, started as a managed health care plan serving Medicaid members in Ohio. It agreed to serve eight bare counties in the Buckeye State and four in Indiana, citing its commitment to “vulnerable populations.”

Molina Healthcare, which is filling three other Ohio counties, also cited its mission to provide “high-quality care” to people who receive government assistance.

Experts said taxpayer-funded subsidies are a key selling point for insurers who’ve opted to stick with Obamacare despite its costlier-than-expected customer pool and widespread uncertainty around President Trump’s commitment to enforcing the law as written.

Companies know that subsidies rise with premiums for benchmark plans on Obamacare’s exchanges, even if that means taxpayers as a whole end up paying more to blunt higher rates.

“Given that subsidized participants are immune from big rate increases so long as they buy one of the two lowest-cost plans — easy when there is only one carrier — the customers will still buy the more expensive coverage and the carriers will make money,” said Robert Laszewski, a health policy consultant in Alexandria, Virginia.

Pitched as a spur for the markets, President Obama’s overhaul fell short of enrollment targets in the early rounds, particularly among young and healthy customers who keep costs in check. Yet holes opened up in the Obamacare market after big players ran out of patience with early financial results.

Departures by UnitedHealth Group and Aetna last year kicked off a trend that came to a head earlier this year.

Humana also decided to exit completely, causing a brief panic in swaths of Tennessee before BlueCross BlueShield of Tennessee stepped in.

“We are seeing improved financial performance this year, but the decision was primarily mission-based — we wanted to make sure Tennesseans had at least one option for coverage, if at all possible,” BCBS spokeswoman Alison Counts Sexter said of the decision to step in.

Anthem, meanwhile, decided to withdraw from a series of states, including Virginia, next year, citing a “deteriorating individual market” and uncertainty out of Washington.

It’s unclear if insurers stepping into the breach will thrive in 2018 or run into the same problems as those who bailed out. The underlying population in those areas may prove to be just as costly and challenging for the new players.

For now, however, being the only game in town does have its advantages, analysts say.

“You know you’re going to get all the enrollment in that place and you can set your rates how you want and gain some market share,” Mr. Sloan said.

Medica, an insurer in the Midwest, would have left much of Iowa without any choices under Obamacare if it had bailed in 2018. It decided to stay, though requested an average increase of 57 percent for silver plans in exchange.

Consumers across the country are likely to see rate hikes that aren’t quite so high though still in the double digits — driven by problems with the 2010 law itself and Mr. Trump’s refusal to commit to paying “cost-sharing” reimbursements for insurers and enforcing the individual mandate that requires people to enter the marketplace or pay a tax.

Beyond higher premiums, a shorter enrollment period, a lack of outreach by Mr. Trump and even fewer insurers to choose from than this year are combining to make the 2018 enrollment period the most challenging yet in Obamacare’s short life.

“Under Obamacare Americans were promised access to a wide variety of high-quality, affordable coverage options. Obamacare has failed to deliver — an unfortunate reality for the American people who are required to buy Washington-approved health insurance or pay a fine,” Department of Health and Human Services spokesman Matt Lloyd said.

HHS repeatedly called attention to the “bare county” issue earlier this year, though mainly as a way to cheer on a repeal effort that stalled out, leaving it to state officials to rally insurers to fill holes in the market ahead of the enrollment season that kicks off in November.

“It was embarrassing for the state of Nevada not to have coverage in those areas,” Gov. Brian Sandoval, a Republican, said last week in announcing Centene’s decision to offer a choice in 14 of his state’s 17 counties.

Wisconsin regulators confirmed this week they found an insurer willing to deal with those challenges and fill their only remaining bald spot — Menominee County — leaving Paulding County and its 330 customers as the only swath of the U.S. still clamoring for at least one option.

Ohio regulators said they are working to locate a willing insurer since customers must use the exchange to qualify for tax credits that knock down the price of insurance for more than 80 percent of Obamacare customers.

“It’s a small number of people,” Ms. Cox said. “Of course, it’s still likely going to be a hardship for those people if they can’t get a subsidy.”

• Tom Howell Jr. can be reached at thowell@washingtontimes.com.

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