Individual insurance plans at risk in more areas with Trump threats

Uncertainty over the Affordable Care Act's fate is threatening the future of the market for everyone who buys their own insurance in some areas, as insurers exit both the public exchanges and individual insurance sales altogether.

President Trump escalated fears this week by saying he may not authorize payment of the Affordable Care Act-required subsidies that up to 7 million people use to help pay their health care deductibles and co-payments. Trump said the move should prompt Democrats to negotiate on health care reform.

But now, a bipartisan group including high-level former members of Congress and regulators is fighting back. In a statement released Thursday by the Bipartisan Policy Center, former Senate majority leaders Bill Frist, R-Tenn., Tom Daschle, D-S.D., and others said the uncertainty means higher costs for consumers and noted more insurers will leave the exchanges and either stop selling individual insurance plans altogether or significantly boost premiums.

Frist, a doctor, is apparently the highest-level Republican to come out in favor of the cost-sharing reduction (CSR) subsidies, and he was joined by conservative health experts including Avik Roy, James Capretta and Republican former Health and Human Services official Gail Wilensky.

"In my conversations with health care executives, insurance CEOs and health policy experts, the number one issue raised to stabilize the market while we make broader improvements to the ACA was continuing to pay CSRs in 2018," Frist said in an emailed statement.

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These subsidies are available on a sliding scale for consumers with incomes between 100 and 250% of the federal poverty level or between about $24,000 and $97,000 for a family of four. About half of people eligible for these subsidies have income below 150% of the poverty level. Approximately 58% of federal marketplace customers receive subsidies, according to HHS data.

Most of those eligible for the subsidies saw their out-of-pocket expenses drop between $1,000 and $1,500 a year and those with the lowest incomes could have their deductibles lowered by up to $3,500 a year in 2017, the statement said.

The Centers for Medicare and Medicaid Services made some other changes to stabilize the ACA market in a final rule late Thursday including shortening open enrollment from three months to six weeks and making it more difficult to become eligible for a special enrollment period. But the trade group America's Health Insurance Plans said continued funding of the subsidies remains the change that's most needed.

"Without funding...many plans will likely drop out of the market," said AHIP CEO Marilyn Tavenner, a former CMS administrator. "Premiums will go up sharply – nearly 20% -- across the market."

Real estate agents and other self-employed people who don’t get insurance through the government or their employers didn't have to buy their individual plans on the federal or state ACA exchanges unless they were getting tax credits or subsidies. Some insurers that left the Affordable Care Act exchanges in certain states continued selling these off-exchange plans so they wouldn’t be prohibited from returning if conditions improved under some states' laws.

That’s starting to change:

• Iowa. There’s only one small insurer — Medica — left in most of the state selling individual insurance plans for 2018 with the departure of both Aetna and Wellmark. Medica still hasn’t committed to selling individual insurance in Iowa for 2018. That means Iowans in most counties could be left with no carriers offering individual insurance. Iowa Insurance Commissioner Doug Ommen, appointed by the state's Republican governor, says he understands the companies’ hesitation to continue selling money-losing policies in an uncertain environment. The ACA limits how his office can respond, he says.

“Without congressional action, we’re very limited in what we can do,” said Ommen.. “This is a federally created situation, and we need a federally created solution.”

• Tennessee. Humana is no longer selling plans on or off the exchanges in Tennessee for 2018, while 16 counties in the eastern part of the state currently have no on-exchange plans for next year. Without assurances about the future of the state’s marketplace, Tennessee’s insurance commissioner said it would be difficult to lure insurers back to counties without them.

"You know I think any change In Obamacare that would increase an insurers’ appetite to assume risk would be so helpful from a competitive perspective,” said insurance commissioner Julie Mix McPeak.

• Arizona. Humana and UnitedHealthcare no longer sell on- or off-exchange plans. Six of eight health insurance companies — most citing losses and the unpredictability of the market — exited Arizona’s marketplace for 2017.

A UnitedHealthcare affiliate still sells “short-term” plans in Arizona that don’t cover a person for the entire year and don't comply with the ACA. Some can exclude coverage for existing medical conditions. These plans, which typically last three months, have become a popular option for Arizona consumers facing a lack of choice this year. Arizona’s benchmark plan had the largest premium increase in the nation this year and is the third most expensive among the 44 states, according to HHS.

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As deadlines loom between now and June for insurers to file their rates with states, they need assurance from the Trump administration and Congress that the subsidies will continue to be funded, said Wilensky. Without this, "more insurers will drop out of the insurance exchanges. endangering access to care for too many Americans," she said.

The House filed a lawsuit against the Obama administration claiming it was illegally reimbursing exchange insurers for reducing cost sharing for low-income customers. The suit is still pending and the 10 people who signed onto the Bipartisan Policy Center's statement didn't take a position on it.

"If insurers leave and other insurers don’t come in to participate, that would be called a market failure," said Andy Slavitt, former acting administrator of the Centers for Medicare and Medicaid Services and a letter signer.

Insurers' total withdrawal from the individual market in some states is ominous, says the Robert Wood Johnson Foundation’s Katherine Hempstead, but she notes states would have other options to prevent the markets from exploding as President Trump has predicted for the health law he still vows to repeal. They include allowing people to buy into Medicaid managed care or state employee plans.

"Insurers are looking for certainty from the administration and Congress to stabilize the individual marketplace.  Without committing now to the continuation of CSR payments, many Americans may lose access to much needed health care," Daschle said in an emailed comment.

That would be a familiar scenario for Phoenix resident Kim Sertich, 54, who said her insurance has been canceled three times since the ACA exchange launched in 2014.

In past years, Sertich managed to find a new plan with coverage that fit her needs, but the exodus of insurers from Arizona’s individual marketplace this year made that option all but impossible.

With only one marketplace insurer remaining in Phoenix's Maricopa County this year, Sertich’s monthly insurance bill would have more than doubled to $809. She dropped out of the marketplace and signed up for a health care-sharing ministry, Liberty HealthShare.

“For me, opting out of the ACA was a slow build,” Sertich said. “Basically, every year I had to go through the process all over again.”

She pays $199 a month for a Liberty HealthShare plan that does not pay for prescription drugs. She is healthy and optimistic that the coverage will meet her needs now, but she worries what’s ahead for similar people who don’t qualify for marketplace subsidies and have few options.

The erosion of the once-robust individual market in Arizona has left residents scrambling.

Arizona insurance broker Justin Bro, said some people have tried to piece together coverage by signing up for short-term plans, even though they don't offer much coverage. Potentially worse, if they develop a medical condition while enrolled in a short-term plan, they may not be able to renew their coverage because these plans can screen for existing health conditions.

“They would be without insurance altogether, which is a scary proposition,” Bro said.

What's your health care experience? Tell us at healthinsurance@usatoday.com