Two of four insurers will no longer sell Obamacare plans in Indiana

WASHINGTON – Anthem and MDwise, the two insurance providers that sold Obamacare plans in all 92 Indiana counties this year, are pulling out of the health exchanges created by the Affordable Care Act.

Anthem, which covers about 46,000 Hoosiers through exchange plans, cited volatility in the market when announcing Wednesday it will not offer 2018 plans.

MDwise, which covers 30,800 in exchange plans, wants to focus instead on its Medicaid plans, which serve 370,000 Hoosiers. The decision was also influenced by the growing uncertainty over the future of the federally-subsidized market, MDwise said Wednesday.

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About 147,000 Hoosiers were enrolled in an exchange plan in February, according to the nonpartisan Kaiser Family Foundation. 

Some could end up without a coverage option depending on where the two remaining insurance providers — CareSource and Centene — decide to offer plans.

The only plans Anthem will continue to sell on the individual market — which is different from insurance offered through employers or government programs such as Medicare and Medicaid — is coverage that doesn’t qualify for the federal subsidies available on the exchange. Those plans will be offered in five counties: Benton, Newton, White, Jasper and Warren.

Anthem's decision also doesn't affect individual plans purchased before March 2010, which were grandfathered from complying with ACA rules.

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In announcing its decision, Anthem spokesman Tony Felts said it’s too difficult to know how to price health plans in the exchange "due to a shrinking and deteriorating market" and "continual changes and uncertainty in federal operations, rules and guidance."

Those include whether the federal government will continue to pay insurance companies for the discounts they’re required to give low-income customers to help pay for deductibles and co-payments.

“A stable insurance market is dependent on products that create value for consumers through the broad spreading of risk and a known set of conditions upon which rates can be developed,” said Felts.

Of the four insurance companies that sold 2017 plans in Indiana, only Anthem and MDwise offered coverage in all 92 counties. 

Wednesday is the deadline for insurers to file 2018 rate requests with the state, although final participation decisions won't be made until fall.

The preliminary filings are expected to become public Thursday.

CareSource has said it will have to raise rates at least 15 percent if it can't count on the government continuing to subsidize the cost-sharing reductions for low-income customers.

Insurers could submit increases as high as 40 percent with more than two-thirds of that hike tied to questions about the subsidies and whether the Trump administration will enforce the requirement that most people have insurance, according to a recent actuarial analysis by the consulting firm Oliver Wyman.

The actuaries estimated that from 5 percent to 8 percent of rate increases could be due to rising health care costs. Insurers also are likely to factor in a 3 percent increase to make up for reinstatement of a tax on health insurers imposed by the Affordable Care Act that was temporarily suspended.

Still, Anthem’s and MDwise's decision to withdraw from the market is cited by Republicans as evidence that Obamacare doesn't work, and by Democrats as evidence that Republicans are deliberately sabotaging the system to make repealing the law easier.

"Indiana is one of many states where Obamacare is failing to provide citizens options to affordable, quality healthcare," Gov. Eric Holcomb, a Republican, said Wednesday.

Sen. Joe Donnelly, D-Ind., said the insurers' decision was forced by the Trump administration's "deliberate strategy to create chaos and undermine the health care coverage of Hoosiers." That includes, Donnelly said, the administration not committing to funding the subsidies and curbing enrollment outreach efforts after Trump took office in January.

"This makes no sense," Donnelly said on the Senate floor Monday. "If your house needs repairs, you don’t set the house on fire. You work to fix the issues."

Felts said Anthem “will continue partnering with the state of Indiana to advocate for solutions that will stabilize the Indiana market to allow us to return to a more robust presence in the future.”

Big uncertainties include whether Congress will change insurance rules, subsidies and coverage options in Republicans’ pending rewrite of the ACA.

In addition, the Trump administration could decide to end the cost-sharing subsidies, which are the subject of a legal challenge brought by congressional Republicans.

Besides the uncertainty of the subsidies, other concerns Anthem cited included the restoration of a tax on health insurers imposed by the ACA as a way to help pay for the bill. 

Republicans, who control the House and Senate, want to repeal that — and other — taxes included in the ACA. The cost would be offset by scaling back Medicaid funding, one of the main ways Obamacare reduced the number of Americans without health insurance. The House-passed bill to rewrite the ACA would also eliminate the cost-sharing subsidies for private insurance and would revamp other subsidies that reduce the cost of premiums for exchange plans.

Senate Republicans are expected to release their version of the rewrite Thursday.

Since the ACA passed in 2010, the share of Hoosiers without insurance fell by more than a third, down to 9.6 percent in 2015. More than 300,000 Hoosiers gained coverage.

Premiums haven’t increased as much in Indiana as in many other states for plans sold on the exchanges that began in 2014. (Premiums for mid-level plans in Indianapolis this year tied for 10th lowest among each state’s major city.) But that’s in part because Indiana’s premiums started out higher than average. And, as in other states, the cheapest plans come with high deductibles and other out-of-pocket costs.

More than 70 percent of Hoosiers on the exchange receive subsidies to reduce premiums. Nearly half also get help with co-payments and deductibles.

The number of insurance companies participating on the exchange initially doubled from four in 2014 to eight in 2018, but then shrunk back to four. 

In addition to selling exchange plans, Anthem and MDwise are also involved in Indiana's Medicaid program, which expanded under the ACA. The insurers contract with the state to offer Medicaid coverage through the Healthy Indiana Plan and other Indiana Medicaid programs. 

MDwise began offering exchange plans in 2014 as a way to keep customers who no longer qualified for Medicaid. But fewer members than expected have lost their Medicaid coverage and entered the exchange. MDwise said it lost $21 million on its exchange plans last year.

Contact Maureen Groppe at mgroppe@gannett.com.  Follow her on Twitter: @mgroppe.