- State health insurance exchanges are likely to see more disruption in the health insurance market with some payers either leaving the individual consumer marketplace or limiting their offerings in the coming year. The health payer UnitedHealthcare is not the only one leaving the health insurance exchanges.
Blue Cross and Blue Shield of Minnesota is also moving away most of their plans from the individual market or their state’s health insurance exchange, according to a company press release.
In 2017, consumers should be prepared to see only Blue Plus HMO plans from Blue Cross and Blue Shield of Minnesota sold through the health insurance exchanges. This particular health plan will be able to offer accountable care organization services among families and individual consumers, the release states.
It is also important to note that policies sold through employers or via state public programs will not be impacted by the payer’s change in status and move away from the health insurance exchanges.
Another key part of the notice is that the individual market is undergoing very transformative changes that are leading to major spikes in prices for consumers as well as the health payer. Changes in health plan participation have also been volatile and may have affected the payer’s move from the individual market.
This change in status will be affecting more than 100,000 individuals across the state of Minnesota who will need to pursue other options for their medical coverage through the health insurance exchanges.
Blue Cross Blue Shield of Minnesota expects to see a loss of $500 million through the individual marketplace over the course of three years if it continues to operate via the exchange, National Public Radio reported.
The payer also reported in a media advisory that it had lost as much as $265 million in 2015 because the the cost of medical care was far greater than the price of their monthly premiums.
UnitedHealth Group Inc. also stated at the end of last year that it will most likely leave the federal and state health insurance exchanges starting in 2017. The profit loss and financial risk of selling plans on the exchanges were too great for this major health payer as well. In 2015, the company fell victim to a quarter of a billion dollars in losses. Ever since UnitedHealthcare announced its plan to leave the exchanges, experts questioned whether this move will affect other payers.
“UnitedHealthcare doesn’t feel like it can stay profitable in that group of business and it would indicate that others might be struggling as well,” Merrill Matthews, a resident scholar at the Institute for Policy Innovation, told HealthPayerIntelligence.com.
“Several insurers came out and said that they’re still committed to being here, but it might indicate the death spiral that we’re concerned about in the exchanges,” Matthews continued. “There’s been a long-running concern that what the exchanges will ultimately be is the place where the people who are the sickest and need subsidies from the federal government will reside.”
“The question comes about – would even some of those people be able to buy cheaper insurance, even considering the subsidies, outside of the exchange if a death spiral initiates. If so, does that ultimately make the exchanges unworkable?”
Clearly, there is some volatility in the individual market that is causing some payers to rethink selling their health plans through this platform. While a few payers may have jumped out of the market, others are raising their premium prices further over the coming year.
The Associated Press reported that the cost of an individual plan in the state of Nevada will rise 15 percent in 2017. Consumers should expect a variety of changes regarding their medical coverage in the coming years due to transformations taking place in the individual marketplace.