Anthem Threatens Obamacare Retreat If Results Don’t Improve

According to a Bloomberg article published online, Anthem Inc., which has so far stuck with the Obamacare markets as rivals pulled back, said it may retreat in 2018 if its financial results under the program don’t improve next year.

  • If California becomes one of the states exited, those with Anthem individual policies will be affected.
  • For 2017, Anthem has already significantly raised rates, and reverted to more network Exclusive Provider Organization, (EPO) from PPOs in Southern California, and most of Central and Northern California.

“If we do not see clear evidence of an improving environment and a path towards sustainability in the marketplace, we will likely modify our strategy in 2018,” Anthem Chief Executive Officer Joseph Swedish said on a call Wednesday discussing third-quarter results. “Clearly, 2017 is a critical year as we continue to assess the long-term viability of our exchange footprint.”

Anthem expects to post a narrow profit margin next year in exchanges created under the ACA, following losses that Swedish called “disappointing.” Profitability will improve thanks to plan changes and premium increases averaging more than 20 percent, but Anthem said it will take more than that to stabilize markets that have so far drawn about half the membership it was planning for.

The company called for eliminating a tax on health insurers, as well as changes to regulations that govern how plans are sold and administered.

“Both the pricing and regulatory environment need to be improved,” Swedish said. He said the company would be “surgical” in assessing where to sell ACA plans for 2018.

Anthem sells health coverage under the Blue Cross Blue Shield brand in 14 states (including California), and has a big position in the market for plans sold directly to individuals. The Indianapolis-based company said Wednesday that it had 889,000 people signed up under individual Obamacare exchange plans, and a total of about 1.4 million members in individual plans.

Large rivals UnitedHealth Group Inc., Aetna Inc. and Humana Inc. have all retreated from many of the Obamacare exchanges. If Anthem pulls back in 2018, it would leave mostly regional and not-for-profit firms on the markets, along with the Medicaid companies Centene Corp. and Molina Healthcare Inc.

Anthem expects the overall market for ACA compliant plans — both on- and off-exchange –will shrink next year, Chief Financial Officer John Gallina said. The insurer’s membership in the individual market will fall as well, he said.

*Modified from a Bloomberg.com article, Political.com and other online sources.

 

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