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Arizona's Blue Cross reverses Obamacare exit

Joe Raedle | Getty Images

Arizona's Pinal county will not go down as the nation's first region to have zero Obamacare plans next year.

Blue Cross Blue Shield of Arizona said Wednesday it will now offer Obamacare plans for individuals and families in Pinal county next year, out of concern that some 10,000 exchange plan customers would have faced the prospect of having no health insurance options come January.

"We are committed to serving these areas in 2017," said Rich Boals, Blue Cross president and CEO, in a statement.

It's a big reversal for Arizona's largest insurer in a year that has seen dramatic twists and turns by insurers exiting the Obamacare exchanges nationally. Blue Cross had previously announced it would drop Obamacare coverage in both Pinal and neighboring Maricopa county, after losing more than $185 million on Affordable Care Act exchange plans between 2014 and 2015.

State and federal insurance regulators signed off on the insurer's proposed new rate request late Wednesday after weeks of discussions. The insurer plans to increase rates by more than 50 percent, but said that for many Pinal residents, much of the increase will be offset by Obamacare subsidies.

The company said officials need to do more to make the ACA marketplaces viable.

"Regulators and policy makers must find a way to stabilize the market and put long-term fixes in place," said Boals. "In the meantime, [Blue Cross] is trying hard to balance the company's financial losses from the ACA with the very real concerns of Arizonans."

Blue Cross said it will still drop Obamacare coverage for Arizona's metropolitan Phoenix market: Maricopa County. This year the area had eight insurers, and after the exit last week of local insurer Phoenix Health, Cigna will be the only insurer offering plans for the area's 125,000 Obamacare plan customers in 2017.

"There's not any obvious reason for this, I think it's more a chain of events that occurred," said Jim Hammond, publisher of the Hertel Report insurance newsletter in Phoenix.

"It all started early in the year with United Health leaving. Then, we had Health Choice leave, we had Humana leave, and Aetna," he explained. "The only ones left standing were Phoenix Health Plan and Cigna. And Phoenix Health Plan is a very small plan."

He believed the small insurer was not in a position to scale up its business to meet the greater demand in January. "That's a scary prospect for a health plan to get that big that fast."

Pinal was the only county in the state and the nation that faced the prospect of having zero Obamacare plans next year. Obama officials had said all along that they were working to find a solution.

Health Human services spokesman Ben Wakana said, "We remain confident that all Arizona residents will continue to have access to coverage next year."

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