Exit from health insurers creates problems for Obamacare in Texas

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The roughly 1.3 million Texans who purchased health insurance under the Affordable Care Act will likely have fewer, more expensive coverage options in 2017, as health plans continue to advertise they will not sell. plus their products in Texas.

Insurance start-up Oscar announced on Tuesday that it would be partially pulling out of the Texas market, joining veteran health plans Aetna, UnitedHealthcare and Scott and White on the list of companies that recently announced they would exit the market. created by President Obama’s Health Act. The companies have said their costs of covering middle-income Texans are unsustainable, fueling concerns about the lack of competition and consumer choice in the health insurance market next year.

The announcements come at a time of uncertainty for health insurance markets nationwide, with several large health insurers opting to exit trading in nearly every state. And Cigna, another health insurance company, told the Houston Chronicle last week that it was “in discussions” with state regulators over the exit from the Texas Stock Exchange.

“I think we should expect significantly higher premiums, and I think there is a real risk that other insurers will pull out, ”said Michael Morrisey, professor at Texas A&M University School of Public Health. “We may be starting to see the death spiral of insurance plans in trade.”

In addition to the market contraction, major health insurers who have not indicated they will exit the stock market – most notably Blue Cross Blue Shield of Texas – have asked the federal government for permission to increase their monthly costs up to at 60%. Blue Cross says its financial losses in the market were surprisingly large and that last year the company stopped offering one of its plans, which covered 367,000 Texans.

A spokeswoman for Blue Cross Blue Shield of Texas said on Tuesday that the company had made “no final decisions” regarding its 2017 offerings.

“We have been in this market for 80 years and although some operators have chosen to exit the market, we are working to continue providing health insurance options to consumers in Texas,” said spokesperson Edna Perez. -Vega, in an email.

“However, this needs to be done in a sustainable manner,” she added, noting that the insurer lost $ 770 million in the Texas market in 2015.

In addition to Blue Cross, a dozen small insurers are expected to remain in the Texas market in 2017.

Sherri Greenberg, a professor at the LBJ School of Public Affairs at the University of Texas, said monthly health insurance premiums would likely increase statewide. But she said many Texans might not feel the effect of the increases because they will continue to receive federal grants – a pillar of the law meant to offset the cost of health care for many Americans.

Greenberg said the 2017 price hikes in the Texas market could vary widely across the state, with rural markets likely to see the biggest changes.

“If you had very few options to start, and now you have [even] fewer carriers and less competition can mean higher insurance premiums, ”she said.

Competition could improve further if other insurers choose to enter the Texas market before the September 23 deadline. It is also possible that other health plans choose to exit the market before this date.

The Obama administration has said it is confident that the “majority” of people who sign up for coverage under the Affordable Care Act will have multiple coverage options in 2017 and will be able to purchase one. plan for less than $ 75 per month. The federal government reported that the average Affordable Care Act health plan in 2016 cost around $ 400 per month, but after tax credits, the average registrant was paying $ 113 per month.

The lack of participation of insurers in the exchange of the Affordable Care Act is of particular concern for rural areas. Scott and White, who says he will continue to offer some individual market plans outside of exchange, has had a significant presence in some of the less populated areas of the state.

An August 19 analysis by healthcare consulting firm Avalere Health found that more than a quarter of the 26 geographies designated by the federal government of Texas may have only one insurer offering plans on the exchange in 2017.

“Lower-than-expected enrollments, a high-cost population, and challenging risk mitigation programs have resulted in decreased plan participation for 2017,” Dan Mendelson, president of the company, said in a statement.

Health economists say newly insured Texans required more expensive care than companies were willing to handle. Last year, insurers struggled to enroll enough healthy people to cover the costs of patients with expensive medical needs, despite a provision in the law that requires people without health insurance to pay a fine. Health Plans have also criticized Congress for cutting funding for programs meant to offset their financial losses on the exchange.

The Affordable Care Act offers subsidies to some middle-income Americans who buy insurance on the stock market, and it requires insurers to provide more comprehensive – and, for insurers, more expensive – coverage. The law also resulted in a drop in the percentage of Texans without health insurance, from 25% of Texans before the law was passed to about 17% in 2016, according to the Obama administration.

Many health insurance companies that left the stock market in 2017 have said they will return in the coming years if the market becomes less volatile.

Mario Schlosser, managing director of Oscar, which has insured approximately 7,000 people in the Dallas-Fort Worth area, said in a statement that market uncertainties have made it “difficult for us to operate effectively and continue to provide a access to quality health care. “

“We hope to return to these markets as we continue our mission to change healthcare in the United States,” he wrote. The company said it will continue to provide coverage in San Antonio.

Membership period for 2017 coverage begins November 1.

Read more:

• Federal officials have Specifically targeted Texans in their efforts to increase health insurance enrollments under the Affordable Care Act.
• Data from the 2015 U.S. Census showed that, for the first time in more than a decade, Texas’ uninsured rate fell below 20 percent. Yet Texas continues to have more uninsured people than any other state.

Correction: An earlier version of this article stated that Oscar’s health insurance was leaving the Texas market. Oscar is leaving the North Texas market but will continue to provide coverage under the Affordable Care Act in San Antonio.

Disclosure: Blue Cross Blue Shield of Texas, Texas A&M University, and University of Texas at Austin have financially supported The Texas Tribune. A full list of Tribune donors and sponsors can be found here.