Medica will be the only insurer selling individual market coverage next year on health exchanges for Iowa and Nebraska, meaning the Minnetonka-based nonprofit is one of several companies across the country keeping markets alive that had been threatened by an exodus of carriers.
Earlier this year, it looked like a chunk of counties across the country would lack individual market health plans altogether. Large insurers like Minnetonka-based UnitedHealthcare, Connecticut-based Aetna and Kentucky-based Humana announced large or complete retreats from the exchanges, which were launched as part of the federal Affordable Care Act (ACA).
Some regional health plans announced pull backs, as well. The health law doesn’t provide a way to deliver subsidies to consumers in counties where insurers don’t sell individual market coverage.
In the final analysis, however, it looks like there will be no “bare” counties anywhere in the country, said Katherine Hempstead, senior adviser with the Robert Wood Johnson Foundation. She said about 50 percent of all counties next year will be like all those in Iowa and Nebraska in having only one on-exchange health insurer.
“We felt confident we could develop ... the right products and price them appropriately, so that we could have an option for every consumer in those states while not putting the organization at too big of a financial risk,” said Geoff Bartsh, a Medica vice president.
State regulators are making announcements this week about health exchange options for next year as insurers meet deadlines for signing government contracts. Open enrollment starts Nov. 1
The exchanges are an option for those shopping in the individual market, which primarily serves people under age 65 who are self-employed or don’t get coverage from their employer. Health insurers have pulled back from the government-run marketplaces after suffering financial losses.
“We are not a large national for-profit carrier,” Bartsh said. “We are still a local nonprofit health plan that is expanding geographically, but our roots and our mission is still one that has us committed to consumers.”
In Iowa, Medica will increase premiums by an average of 56 percent next year. In Nebraska, the average rate increase will be 30 percent, Bartsh said.
In both cases, regulators let Medica set prices that assume the federal government will stop making “cost-sharing reduction” payments to insurance companies, which health plans pass on to consumers in the form of smaller deductibles and/or out-of-pocket spending requirements. President Donald Trump’s administration has threatened to stop making the payments, which insurers say would have the effect of significantly boosting premiums.
Medica currently sells individual market coverage in North Dakota, but the insurer plans to leave the state’s health exchange for 2018. North Dakota regulators did not let Medica build into its rates an assumption that the cost-sharing reduction payments would cease, Bartsh said.
In Minnesota, officials with the state’s MNsure exchange say all four health insurers that currently sell products are returning for 2018 — Blue Cross and Blue Shield of Minnesota, HealthPartners, Medica and UCare.
After competing in 33 state exchanges this year, UnitedHealthcare said it will compete next year in just two states, New York and Nevada.
Minneapolis-based startup Bright Health says it will start selling coverage via the health exchange for a portion of Alabama next year. The insurer currently sells only on Colorado’s health exchange.