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Can States Do Anything to Keep Health Insurers From Leaving?

Ohio and Missouri now have dozens of counties without an insurer. Other states are trying to prevent a similar situation, but their actions can only go so far.

Anthem photo
When news broke last week that health insurer Anthem would not be participating in Ohio’s marketplaces -- leaving more than 10,000 residents without insurance options -- it confirmed what many people had feared: that the uncertain future of the Affordable Care Act would send insurers fleeing state marketplaces. The news in Ohio came on the heels of Blue Cross and Blue Shield of Kansas City pulling out of Missouri exchanges, leaving 25 counties and 67,000 people in the northwest corner of the state without an insurer.

Health experts had been predicting these kinds of effects, given the general uncertainty over how, or whether, Congress will act on the landmark legislation. “Insurers are in the business of making a profit, or at the very least not having huge losses. So actuaries in some companies are just throwing up their hands,” says Tim Jost, professor emeritus of health care law at Washington and Lee University.

There’s anxiety among state and county officials that the latest insurer exits are just the tip of the iceberg, and they are starting to take action. New York Gov. Andrew Cuomo last week announced "emergency regulations" to safeguard his state’s marketplaces, barring any company that leaves the state marketplace from participating in Medicaid managed plans or children’s health insurance.

Cuomo may have gotten inspiration from Nevada, which instituted a similar regulation earlier this year. While not as tough as New York's rule, Nevada's measure informed insurers that applications for Medicaid would get preferential treatment if they participated in the exchanges. The state will have five insurers this year, and rates are expected to be lower than average. 

Jost says those moves are good. Health experts also say that insurance commissioners can and should be proactive in having conversations with insurers.

But there's only so much state leaders can do. “I think states are trying, but the answers are really at the federal level,” says Sandy Ahn, a research professor at Georgetown University’s Center on Health Insurance Reforms.

Whether or not "repeal-and-replace" happens in Congress, a bigger part of the confusion comes from President Trump’s inconsistent statements on whether his administration will continue to fund cost-sharing reductions. Cost-sharing reductions, or CSRs, are the subsidies people receive for their health care plans, and more than 80 percent of marketplace enrollees qualify for one. Without that money from the federal level, insurance plans will be too expensive for most enrollees.

Trump's inconsistent statements have been a bit of whiplash for health experts. In April, the administration said it would continue to fund cost-sharing reductions. Just a few weeks later, Politico reported that Trump told White House aides he wouldn't fund them, so it would "explode the entire act."

“This game of chicken is really destructive," says Jost. "We could get things under control once that happens,” Jost says, referring to a guarantee from the administration that CSRs will be funded.

Representatives from both Ohio and Missouri’s departments of insurance say they are exploring options to bring relief to those customers left without an option for insurance. Amy Rohling McGee, president of the Health Policy Institute of Ohio, says the state might request a federal Medicaid waiver that would give financial assistance so consumers could buy plans off of the exchange. But if the federal government won’t guarantee that cost-sharing reductions will be funded, then the waiver may not do any good. 

“It’s troubling that 10,000 people in Ohio may not have options," she says. "It’s time to develop solutions, because this is impacting people’s health."

Mattie covers all things health for Governing.

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