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July 10, 2018 at 07:42 PM
Republicans remain eager to gut the Affordable Care Act, but some health plans say there’s no time like the present to be in the Obamacare business.
Rising premiums in the marketplaces created by the health law are enticing insurers, who are looking past the political turbulence and a curveball this weekend from the Trump administration. More than a dozen insurers plan to enter new Obamacare markets for 2019, according to the Kaiser Family Foundation.
Among them is the venture capital-backed startup Bright Health. On Wednesday, the company, which already offers ACA plans in two markets, will roll out offerings in five more cities for next year, according to Chief Executive Officer Bob Sheehy.
(Related: Centene Completes Acquisition of New York State Plan)
“Early on, there was the wrong model and the wrong pricing level,” said Sheehy, a former UnitedHealth Group Inc. executive. “Now the market’s stabilized, so we think it’s a terrific opportunity.”
Oscar Insurance Corp., another startup, will enter six new markets. More established insurers including Centene Corp. and Medica have also announced expansion plans.
“For the insurers that did stick around in the individual market, 2018 is shaping up to be a very profitable year,” said Cynthia Cox, director for the Program for the Study of Health Reform and Private Insurance at the Kaiser Family Foundation. “They’ve managed to raise premiums enough to cover their costs, and then some.”
Changing Market
It’s a reversal from last year, when insurers exited some states as losses mounted and President Donald Trump vowed to dismantle the program. The companies that remained raised rates significantly, with premiums climbing by an average of 27% from 2017 to 2018.
Over the weekend, the Trump administration said it will suspend an ACA program that moves funds to insurers with sicker customers. Health insurance lobbying groups said halting the so-called risk-adjustment program could cause some companies to stop selling plans in some markets or boost premiums even more.
Bright and Oscar both said that despite the move, they’re going ahead with their expansion plans. Medica is entering Oklahoma, adding a second option to that state’s Obamacare market.
“We’re watching the situation closely. We aren’t making any changes to our 2019 plans at this time,” Greg Bury, a spokesman for Medica, said of the risk-adjustment program.
The expansions will give more options to customers in some states where choices had dwindled. For 2018, about a quarter of people signing up for ACA plans could select only one insurer, according to data compiled by Bloomberg. A similar percentage could pick from two.
Trump has boasted that his actions have helped undermine the 2010 law. The administration has taken several steps meant to offer alternatives to Affordable Care Act plans, or to destabilize its markets.
“We’ve essentially gutted it anyway,” Trump told supporters in a June speech. “Obamacare is on its last legs. It’s almost finished.” On Tuesday, his administration announced it would cut funding for “navigators” who help people find and sign up for Obamacare plans to $10 million, from $36 million last year, calling the program ineffective.
Insurers can adapt to market turmoil by raising rates. Premiums are set to climb again in 2019, according to a preliminary survey from Kaiser. Insurers began filing rate plans with state regulators this spring and will wrap up in the fall ahead of enrollment season.
