- Wellmark Blue Cross Blue Shield, which operates in Iowa and South Dakota, will not renew or sell individual plans on the Affordable Care Act health insurance exchanges effective Jan 1, 2018.
The decision follows three-year losses of approximately $90 million and increased premium prices of individual health plans governed by the ACA.
“Finding solutions to stabilize this market is in the best interest of all Iowans, including providers of healthcare and insurance carriers,” said Wellmark Chairman and CEO John Forsyth.
“No one really benefits from rising costs. While there are many potential solutions, the timing and relative impact of those solutions is currently unclear. This makes it difficult to establish plans for 2018.”
The challenges associated with ACA health insurance exchanges include inheriting higher risk pools, managing high care costs, and improving enrollment rates.
Because of this, several large private payers have stopped offering individual insurance plans through state insurance exchanges.
Humana made a company-wide decision earlier this year, and also announced their halt of participating in the exchanges by 2018. The payer cited a shaky ACA future and predicted losses of $45 million as reasoning for their exit.
Last year, Aetna announced a plan to cancel an expansion of its participation in the ACA exchanges, and possibly exit as well, because of potential losses in the range of $300 million.
These landmark decisions have affected the quality of ACA individual plans for certain consumers, according to market research from earlier this year. Without large, high quality payers to support the exchanges, 58 percent of consumers cited that their coverage worsened.
Wellmark’s exit from the ACA exchanges affects 21,400 Iowans, or 1.3 percent of Wellmark’s 1.66 million members in Iowa. Members who have purchased these plans will still have coverage through December 31, 2017.
The company stated that this decision does not affect people with pre-ACA coverage, or “grandfathered plans,” purchased before Jan 1, 2014. Individuals with employer plans including small group ACA coverage, or Medicare supplement plans, will also not be affected.
“We look forward to working with state and federal legislators to determine the best path forward to ensure Iowans have access to high-quality health care,” said Forsyth.