Blue Cross Blue Shield of Nebraska said Friday it won’t sell individual health insurance on the Affordable Care Act marketplace next year because of continuing losses.
Blue Cross’ departure removes the state’s largest health insurer from the individual marketplace, leaving only Aetna and Medica Health to offer individual policies on the Nebraska’s exchange for 2017.
Steve Martin, the chief executive of Blue Cross, told The World-Herald that the company has lost $140 million on the exchange policies since 2014. If the trend continued, losses could total $250 million by the end of 2017, he said.
As of this year, around 20,000 people out of Blue Cross of Nebraska’s 750,000 clients have individual exchange policies.
The decision won’t affect the thousands of Nebraskans covered by Blue Cross group policies through their employers or people who plan to renew their pre-Affordable Care Act individual policies.
State and federal rules require companies to submit proposed policies and rates for approval well ahead of time. Blue Cross had proposed substantial rate increases for 2017 and received approvals, but those rates were based mostly on 2015 claims.
If the planned 2017 rates turned out to be too low, Blue Cross would have lost money next year, too, company officials said.
Friday was the deadline for insurance companies to sign agreements with the federal government to offer policies on the exchanges. Open enrollment on the exchanges starts Nov. 1.
Martin said too often federal officials let people buy insurance just before they are due to receive an expensive health treatment and then drop their coverage immediately afterward. As a result, many of them pay no premiums when they are well, only when they are sick.
Last month Aetna announced it would drop out of the insurance marketplaces in 11 states because of losses, remaining only in Nebraska, Iowa, Virginia and Delaware.
UnitedHealth Group decided earlier this year to drop its Nebraska and Iowa individual coverage, and Humana reduced its participation to 11 from 15 states, which did not include Nebraska or Iowa. More than a dozen insurance cooperatives have shut down in the past few years, including the one that served Nebraska and Iowa.
Wellmark, the Iowa affiliate of the Blue Cross network, did not take part in the Iowa exchange in 2014, 2015 or 2016 but last October announced that it would offer policies on the exchange for 2017 in 47 of the state’s 99 counties not including Pottawattamie County and Council Bluffs.
Other companies due to be on the Iowa exchange are Aetna, Gunderson Health and Medica, which is based in Minnetonka, Minnesota.
The exchanges are a centerpiece of the federal health insurance law, also known as Obamacare. They are intended to let millions of people who don’t qualify for group insurance shop for policies and receive guaranteed coverage, no matter what their health.
Date: September 23, 2016