Obamacare Heavyweight Anthem Mulls Retreat From More States
(Bloomberg) -- Anthem Inc. said it may pull back from more state Obamacare markets even as U.S. lawmakers debate steps to shore up the health law.
The health insurer is in talks with officials in some states ahead of deadlines later this month to decide whether to sell coverage in 2018, Chief Executive Officer Joseph Swedish said on Tuesday. The company has announced partial or full withdrawals from nine of the 14 states where it offered Obamacare plans this year.
“There are still some remaining states that we are in negotiation with, both the regulators as well as the legislative arena, to position ourselves appropriately,” Swedish told investors at the Morgan Stanley Global Healthcare Conference in New York. “There are due dates that are still in play with respect to being able to make an announcement, so we’re going to reserve any further statement about whether we’re in our out of various states until those due dates pass.”
The insurer is considering its plans for next year as senators weigh making changes to the Affordable Care Act, with some seeking small fixes to the law while others push for more far-reaching alterations. Efforts to repeal and replace Obamacare failed over the summer.
Anthem had about 1.5 million customers in Obamacare-compliant health plans as of June 30, including about 1 million who signed up through the health law’s exchanges. The stock fell 3.4 percent to $189.24 on Tuesday in New York, the biggest decline in 10 months.
Swedish didn’t say specifically which states Anthem might retreat from.
Of the five states where Anthem hasn’t said it plans to pull back, the insurer has said it will continue to sell Obamacare coverage in three -- Colorado, New Hampshire and New York.
In two other states, the picture is unclear. The company previously told regulators in Maine it would quit that state’s exchange if subsidies for low-income consumers aren’t funded. In Connecticut, insurers have until Sept. 15 to decide whether to participate.
Eric Weinstein, director of legislative affairs at Connecticut’s insurance regulator, referred to the state’s Sept. 15 deadline and didn’t answer questions about Anthem. Maine didn’t respond to a request for comment.
In Washington, senators are holding two hearings on Tuesday about changing the Affordable Care Act.
Tennessee Republican Senator Lamar Alexander, who heads a health committee, has said he wants a small package of bipartisan fixes before insurers like Anthem lock in their 2018 plans this month. Utah Republican Orrin Hatch, who leads the Senate Finance Committee, has been skeptical of providing money for insurers without making more changes to the law.
“I am concerned that many of the proposals for a bipartisan solution would amount to little more than a bailout of the current system,” Hatch said on Tuesday. “An Obamacare bailout that is not accompanied by real reforms would be inadvisable.”
He suggested a bipartisan solution should also at least delay Obamacare taxes on health insurers, medical-device companies and high-cost health plans, as well as repeal a panel that is supposed to make cuts to government health spending if costs reach a certain level.
A key question for health insurers is whether lawmakers will explicitly provide funding for the law’s cost-sharing reductions, which help insurers lower out-of-pocket costs for low-income consumers. Insurers have said that if there’s doubt about whether those payments will be made, premiums could climb 15 percent to 20 percent next year.
Alexander has said his bill would fund the payments and provide more flexibility to states.
Complicating the effort to stabilize Obamacare, Republican Senators Bill Cassidy and Lindsey Graham, of Louisiana and South Carolina, respectively, are pushing their proposal to repeal and replace the health law. They’ve said they’ll release the proposal Wednesday at a press conference in Washington.