Iowa’s largest insurance provider will stay out of the federal insurance marketplace exchange for a third year.
Wellmark Blue Cross and Blue Shield announced Monday the company will opt out of participation in the Affordable Care Act’s health care marketplace, in part because the company would be required to also provide insurance to the small business marketplace.
“Is that the best use of our members’ money?” Laura Jackson, Wellmark’s executive vice president for health care innovation and business development, said in a Webinar Monday.
However, the Des Moines-based company that provides health insurance to 1.7 million Iowans and more than 300,000 South Dakotans expects to be part of the federal exchange in the future, Jackson said.
“It’s not a decision of if we will participate, but when,” she said.
Wellmark’s announcement Monday is significant in that it leaves Iowa with only Bethesda, Md.-based Coventry Health Care selling marketplace plans statewide.
The other statewide seller, not-for-profit CoOportunity Health, was taken over in December by the Iowa Insurance Division. Liquidation began in February. CoOportunity wound up with more members than its reserves could support. It also was unable to obtain additional funds through the federal Centers for Medicare and Medicaid Services.
The ACA requires most U.S. citizens to have health insurance and creates exchanges through which individuals can buy coverage. Low-income Americans can get subsidies to help pay for health care — but those are only available through the exchanges.
The Small Business Health Options Program (SHOP) marketplace allows employers with 50 or fewer full-time employees to choose health and dental insurance plans. Because insurers with a market share greater than 20 percent in the small business market would be required to participate in the program, Wellmark would be the only insurer required to offer SHOP policies, Wellmark Spokeswoman Traci McBee said.
Wellmark also announced Monday it will raise rates by 26 percent to 28 percent in 2016 for about 30,000 Iowans who bought Wellmark plans under the ACA to cover the increased cost of care for this group.
The number of individuals with ACA plans who had claims of $50,000 or higher was 18 percent higher than the baseline population, Wellmark reported. The group also needed more prescriptions, with insulin use among ACA plan holders five times that of the baseline, according to Wellmark.
“The ACA has been a benefit to many consumers who previously didn’t have access to affordable health insurance,” Wellmark reported. “However, covering pre-existing conditions and offering broader benefits comes with a price for all.”
The bulk of Wellmark’s customers, who receive their insurance through their employers, won’t be affected by the rate increase.
Jackson noted Wellmark has paid $27 million to the guaranty association, a group of health and life insurance companies in Iowa that was set up to pay back claims to health care providers due to the CoOportunity failure.
That payment did not lead to the announced rate increase, Jackson said. If need be, the company would have taken that out of reserves because it’s important to Wellmark that the insurance market stays stable, she added.
Date: May 11, 2015