HealthZette

Saying Goodbye to the Obamacare Marketplace

Blue Cross Blue Shield cites ACA's 'increasing instability' ... its 'decreased choice, increased costs'

“We have made the difficult decision to exit the federal government’s public Health Insurance Marketplace, effective January 1, 2017,” Blue Cross Blue Shield of Nebraska posted on its website. “This decision affects certain individual health plans, not Medicare Supplement or group plans.”

As yet another major insurer pulls out of the Obamacare provider pool for 2017, company officials further commented in their online statement: “The increasing instability of the ACA is a serious and ongoing concern … In all too many cases, the ACA is actually causing decreased choice and increased costs. Changes in the health care law are needed to stabilize the ACA.”

“The ACA is actually causing decreased choice and increased costs.”

The company has lost $140 million since 2014 in this market, and the estimate was that losses would go as high as $250 million by the end of next year. Insurers had through the end of the day last Friday to either stay or leave the 2017 marketplace.

“We cannot take another hit,” said Steve Martin, CEO of BCBS, in a media release. “We are very hopeful and will work with federal regulators with positive intent and try to be back in the marketplace next year. But if the markets are worse or don’t change, we can’t guarantee we’ll be back.”

This is the tail end of a mass exodus among insurance giants such as Humana, Aetna, and UnitedHealthCare — all of which departed key markets this year.

Related: The Fragile State of Your Health Insurance

Private insurance companies have had to absorb enormous costs by participating in Obamacare markets, and many of them have reached a breaking point. Federal rules allow too many people to buy health insurance right before an expensive procedure and then drop the insurance once the procedure is over. Since prices for younger clients are too high, many of the healthier people are taking the penalty instead of paying for insurance.

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The lack of healthy people making payments in the interim makes it impossible for the companies to shoulder the burden of their unhealthy customers. Because companies aren’t allowed to screen for pre-existing conditions, they have a harder time predicting costs and expenses. Only the biggest health insurance companies are surviving in the current business climate — and even they’re finding it tough to make ends meet.

David Reid, founder and CEO of EaseCentral, has more than 30 years of experience in employee benefits and group insurance. He told LifeZette that risk assessment is an essential component of any successful business model. You have to purchase more expensive car insurance if you have a DUI on your record, for example. But since the Affordable Care Act forbids any screening on pre-existing conditions, companies are having a harder time “setting premium rates that will support the cost of claims.”

Right now, too many people are not taking the time to navigate a complicated market or become familiar with an obscure set of tools. Even trained businesses are having difficulty figuring out the market these days.

“As a health insurance broker, it is exponentially more difficult to market non-Medicare health insurance,” said Jeffrey Adams, owner of Adams Insurance Services LLC in Raymore, Missouri.

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“We have basically stopped doing it and we’re referring that business to other agents. The HealthCare.gov website is not user-friendly for individuals or brokers, making it very difficult to properly quote coverages and almost impossible to assist consumers with enrollments. Third-party programs are very expensive to use or are not effective tools. The ACA has basically put the onus on individuals to determine what kind of coverage to select and to enroll themselves, without any trained assistance,” Adams said.

Blue Cross Blue Shield is pushing for Congress to make big changes to the ACA once the presidential election ends in November. Those changes include making the markets more appealing to a healthier demographic and providing navigable tools. “We hope, post-presidential election, that whoever gets elected president and whoever is leading both sides of the aisle [in Congress] will come together and concentrate on making some fixes to this,” said Martin.

BlueCross BlueShield of Tennessee also announced Monday that it is withdrawing from the ACA marketplace — but only in the Memphis, Nashville, and Knoxville regions. The change will affect an estimated 100,000 Tennesseans and comes a month after Tennessee officials approved an average rate increase of 62 percent for the insurer.