Last week Anthem and MDwise announced that they’ll both exit the insurance exchange market in 2018, only one year after UnitedHealthcare exited. The departure by Anthem and MDwise will leave Hoosiers in most areas of the state with two carrier options for 2018 – CareSource Indiana, Inc. and Celtic Insurance Co. which sells policies under the name of Managed Health Services (MHS) in the state of Indiana.
Fewer choices for Hoosiers
Anthem and MDwise’s departure supports the trend that continues among insurers across the country. Growing uncertainty about new healthcare laws coupled with poor financial performance of individual exchange plans for insurers is leading more carriers to the same conclusion: it’s not a sustainable product offering. With the departure of Anthem and MDwise, four counties in Indiana – Grant, Posey, Warrick, and Wayne – may not have any offerings on the exchange next year unless another carrier steps in.
Unlike the employer sponsored plans which cover over 45% of Americans, plans offered on individual exchanges offer narrow networks. This means that the plans offer fewer provider choices for participants and/or may limit participants to a smaller number of hospital systems where they live. Individual exchange customers in Indiana lost the only insurer to offer a “full” network when UnitedHealthcare exited in 2017.
Both remaining insurers are asking the Indiana Department of Insurance for a rate increase for calendar year 2018. CareSource’s rates are proposed to rise just over two percent and Celtic is requesting a rate jump of over 20%. Both requested changes must still be approved by the Department of Insurance, so it’s possible those figures will change. With the increases, the average cost of a policy is over $420 per month.
It’s still too early to make any assumptions about future healthcare policy, even after the Senate introduced the Better Care Replacement Act, their replacement for the Affordable Care Act last week. Feedback from within the Senate as well as the Congressional Budget Office suggests that there will need to be modifications to the bill to garner enough support to pass the Senate.
In the ACA world as we know it today, the exit of Anthem and MDwise will have a lesser impact on employers with over 50 lives that are subject to the ACA’s employer mandate – requiring those companies to provide a plan to their employees. The plans these larger employers offer to their employees are employer-sponsored plans and generally provide more robust network access.
Smaller employers, however, that do not offer a plan to employees and rely on the individual exchanges as the way their employees get coverage, will likely hear feedback that coverage is harder to find and more expensive. They’re also likely hear that it’s harder to find a doctor that’s accepting new patients within the network of the plan that they select due to a smaller number of carriers offering plans to participants.
Whether these changes will lead more small companies to begin offering benefits remains to be seen. Employers who don’t offer medical benefits to employees or rely on insurance exchanges as an avenue to insurance for their people should work with their advisor to understand the implications on their situation and chart a course of action.