The Senate has blocked a wide-ranging proposal by Republicans to repeal much of former President Barack Obama’s health care law and replace it with a more restrictive plan.
Insurance giant Anthem, which has already withdrawn from the Obamacare marketplaces in three states, will pull out of more if the federal government doesn’t take action soon to stabilize the market, CEO Joseph Swedish told investors Wednesday.
The biggest area of uncertainty is whether Washington will continue to reimburse insurers for lowering deductibles and co-payments for lower-income customers. Those cost-sharing subsidies were created by the Affordable Care Act but the Trump administration has not committed to continuing them and congressional Republicans are pushing legislation to end them.
“If we aren’t able to gain certainty on some of these items quickly, we do expect that we will need to revise our rate filings to further narrow our level of participation,” Swedish said on a call to discuss the company’s second quarter earnings.
He spoke as the Senate continued debate on GOP efforts to rewrite the Affordable Care Act. It’s unclear whether Republicans have the votes to pass a bill.
While noting that the landscape is changing by the hour and what will happen is “anybody’s guess,” Swedish said he’s confident policy makers understand what insurance companies need to continue selling Obamacare plans to people who don’t get coverage through an employer or a government program.
“We’re very hopeful, and we do believe, that stabilization is a distinct possibility,” he said.
Anthem has already told state regulators in Indiana, Ohio and Wisconsin that it will largely withdraw from their Obamacare exchanges. Some counties in Indiana and Ohio are at risk of having no participating insurer in the exchanges.
About 1.5 million people get Obamacare plans through Anthem, with about 1 million purchased through the exchanges. Close to 10 percent are in the communities where Anthem is pulling out.
While the company has filed proposed 2018 rates in its other markets, Swedish emphasized Anthem could still revise the rates, or decide not to participate.
“The decision making is going to be fast and furious, and time is of the essence for us to make the right decisions,” he said.
If the federal government decides to end the cost sharing subsidies, Anthem would need to raise premiums by as much as 20 percent, officials said. That’s on top of the 20 percent increases already proposed, which take into account such factors as expected increases in medical costs.
In addition to increasing premiums, ending cost sharing subsidies would have cascading effects that include reducing the number of people buying insurance, particularly the healthier customers who help keep costs down.
Anthem had expected the marketplaces to be stable in 2018, after insurers have had four years of experience in who is buying their products and how much medical care they’re using.
Under a stable market, Anthem has set a target of a 3 percent to 5 percent profit for it to remain. But whether that can happen, Swedish said, is “governed in large measure by rules of engagement and the stabilization necessities….coming to reality.”
Anthem reported adjusted net income was $3.37 per share in the second quarter of 2017 compared to the adjusted net income of $3.33 per share in the prior year quarter.
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