On April 4th, Andy Miller of Georgia Health News alerted readers that Anthem, the parent of Blue Cross Blue Shield of Georgia (BCBS), is considering pulling out of the health care exchange market. This will affect the Atlanta marketplace, but there are other insurers these consumers can select. The real trouble is for the 96 Georgia counties that have no other providers participating in the exchange in their area. What do these people do if there isn’t a provider to choose?
Back in 2o09 and 2010, the Patient Protection and Affordable Care Act (PPACA) — better known as Obamacare — took over my life. I was a health and education legislative assistant on the Hill, so of course it did. I’ve always felt that there was an especially heavy hand from the health insurance agencies when it came to drafting the legislation — and I was not alone in that belief — and that “Insurancecare” might have been a better nickname for it than “Obamacare.” (Side note: The quickest way to ruin my day back then was to tell me an insurance lobbyist had dropped by and wanted to know if I could take a “quick meeting.”) I do commend Democrats (and the one Republican, who everyone forgets) who supported PPACA for tackling a very large problem in American health care. I think they tried to fix the wrong problem, however, and now Republicans are in danger of making the same mistake.
Americans want affordable, accessible health care. They think they want insurance, because with the health care system the way it is in this country (and was prior to 2009), that’s what seems to make health care accessible and affordable, but it’s not. However, now we have a problem because we went with an insurance-for-all plan that requires that there is actually insurance-for-all. I’ll explain, but it’s a dense topic, so buckle up!
The premise of getting insurance for everyone under PPACA required that states would expand Medicaid, though twenty states decided not to do that, leaving an insurance gap. Everyone without Medicare, Medicaid, TRICARE, or qualified private insurance was then required to purchase approved health insurance plans, though they would receive federal subsidies based on income. Insurance exchanges were created, either by states or by the Centers for Medicare and Medicaid Services (CMS) for states that refused to set them up. Tax penalties were to be assessed on anyone who dared to go uninsured, and at the time if you’d told me the Supreme Court would uphold that provision, I’d have laughed you all the way out of Rayburn House Building. Nonetheless, it was. However, because insurers knew that they’d be gaining millions of new customers, presumably mostly young and healthy ones, they agreed to limits on the amounts they could increase premiums per year and to end pre-existing conditions as a reason to deny someone insurance coverage. All of this was as clear as mud to American citizens — intentionally so.
Today, PPACA has withstood constitutional challenges on several provisions and what feels like at least 500 repeal votes in Congress. (If anyone’s counting, it’s actually been through 54 repeal votes.) And, even with Republicans in control of both Houses of Congress and the White House, the recent attempt to pass the American Health Care Act ended with the bill being pulled back because Democrats and a large number of Republicans thought it was a terrible replacement for PPACA. An amendment was added Thursday dealing with high risk pools that may give the AHCA life yet, but definitely not until after the two-week Easter Recess that begins Friday. Meanwhile, 480,859 Georgians rely on insurance they receive through the exchanges (run by CMS), and the Kaiser Family Foundation estimates that number is only 41 percent of the total of people eligible for health coverage through exchanges in Georgia. The Georgia General Assembly considered expanding Medicaid for the first time this year, even though it was mostly a passing thought that didn’t get pen to paper. That’s tough cookies for the 309,000 Georgians who are too rich for the unexpanded Medicaid and too poor for subsidies for the exchange, most of whom continue to go uninsured. 67 percent of this group are employed in jobs that do not offer insurance.
In 2016, some of the largest health insurance agencies made record profits, yet they are losing money on the exchanges. That said, they made a windfall when the exchanges were first created, but that gravy train has since stalled. Current losses are partially because those most likely to sign up for exchanges are the older and sicker consumers, whereas the young and healthy are opting to pay the fines. (Reference that number of eligible consumers participating in the exchanges above.) Further, insurers may have set initial rates too low in hopes of undercutting competition back when there were multiple providers for most areas. However, there is speculation that one insurer, Aetna, left the insurance exchanges in retaliation for the Justice Department nixing a merger. Another factor could be because insurance companies prefer not to manage the risk they’re supposed to be managing with health care and don’t want to have to negotiate good deals for consumers.
Whatever the reason (which is probably all of the above), consumers in Georgia outside of the Atlanta area are in real trouble of having no choice for insurance if their employer doesn’t provide it or they don’t qualify for TRICARE, Medicare, or Medicaid. Miller’s article about Anthem’s potential exit from the exchanges discusses the company’s demands to shore up “market stability.” Namely, it wants the penalties and subsidies to stay. Presumably, but not implicitly stated, Republicans stopping the incessant repeal votes would be preferable as well. This comes after Georgia allowed BCBS to raise rates 21 percent after Aetna’s exit from the state’s exchanges last year.
I reached out to Congressman Buddy Carter about this issue. Congressman Carter is a pharmacist by trade, and now he’s Georgia’s Member on the House Energy & Commerce Committee, where he sits on the Health Subcommittee. His district also runs through southeast Georgia, an area that would be acutely affected if BCBS does pull out of the exchanges.
Congressman Carter noted, “The impact of the only insurer on the exchange for a large part of Georgia leaving the marketplace could be devastating. Americans deserve the certainty of choice, more competition, and lower costs instead of headlines that say there’s a possibility their only choice left could be gone soon.” His office has been in contact with Anthem regarding their possible exit from the state’s exchanges.
I also contacted Congressman Sanford Bishop, who represents southwest Georgia and is a member of the Rural Caucus, which has most recently been involved with the rural hospital shortage, and Georgia Insurance Commissioner Ralph Hudgens, who directly oversees all health insurers who offer plans to Georgians. As of the time this was posted, neither Congressman Bishop nor Commissioner Hudgens’ staffs had returned phone calls or emails.
Other states are having issues keeping insurers in their exchanges, too, but have stabilized their markets through different means. Alaska created a reinsurance fund using a new tax levied on all types of insurers to help fund high-cost patients. Nevada took a different approach and required that all insurers that participate in Medicaid in the state also participate in the exchanges. Several states, including Kentucky, Vermont, and Colorado, impose fees on plans purchased in the exchanges. Oklahoma is looking to create a “backdoor Medicaid expansion.” Will these work? I think they will temporarily, which is really the best they can hope for.
In the end, health insurers are publicly-traded businesses, and they are beholden to their stakeholders. If they are not making money on exchanges, they are not going to want to hang around out of goodwill, and it will not matter that they received massive amounts of money when the exchanges were created years ago because that will not affect the bottom line for this year. Maybe I’m too cynical on this, but I foresee the AHCA being as problematic as PPACA for those reasons. I don’t have the long-term solution, but I know continuing with the exchanges is going to continue to be a saga not for the faint of heart.
Note: I briefly toyed with calling this post “Why I Hate Health Insurance Companies: A Primer.” Let’s call it the honorary subtitle.