Health Insurance

Obamacare insurer expands, but big questions loom as rate deadline hits, GOP pushes health plan

Key Points
  • Insurers face deadlines Wednesday to file their initial 2018 insurance rate requests.
  • As the deadline hits, some insurers are still weighing their options and could join or leave markets for 2018.
  • Insurers are facing uncertainty about how Republican health reform efforts will shape the individual health care insurance market next year.
A couple enrolls in Obamacare with an insurance agent in Atlanta.
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While Republicans in the Senate are getting ready to unveil their health reform bill, insurers on the Obamacare exchanges have been revealing their plans for next year ahead of Wednesday's deadline to file initial 2018 rate requests.

"This may be the most closely watched rate filing since the first year of the ACA marketplaces," said Katherine Hempstead, a senior advisor at the Robert Wood Johnson Foundation. "They are rightly seen as important signals about the viability of the individual market in its current form."

Four-year-old health insurance start-up Oscar Health has decided that the Obamacare markets are still viable, and is planning to expand coverage next year.

"We are spending 98 percent of our days thinking about 'what does the product look like? What network can we build?'… and 2 percent worrying about the regulatory framework," Oscar Health CEO Mario Schlosser said.

Oscar is planning on launching in two new states next year, announcing Wednesday morning that it will offer coverage in the greater Nashville area in Tennessee, in addition to its new joint venture to offer a plan with the Cleveland Clinic in northeast Ohio.

But Oscar's expansion won't extend to some of Ohio's potentially bare counties, in the southeastern part of the state, where Anthem's decision to withdraw from the state's Obamacare exchange next year could leave some markets with no insurer.

"We've really got to make sure that our unique strategy around how we build networks … also works," said Schlosser.

Centene announced that it would be expanding coverage into Ohio and Missouri, but a spokeswoman for the insurer said it is still working out which parts of those states it will cover.

As of Wednesday's deadline, roughly two dozen counties in northwest Missouri had no insurers filing to provide 2018 coverage, according to an analysis by researchers at the Kaiser Family Foundation.

"It is entirely possible that Centene or other insurers could move into some counties that appear to be at risk of having no insurer," said Cynthia Cox, the foundation's associate director. "Consumers in these counties shouldn't worry too much yet, as there is still time for insurers to change their service areas. Companies don't get locked in until early fall."

In Washington state, two counties had been facing no insurer coverage, but earlier this week Premera Blue Cross reportedly reversed course, and agreed to remain in one of those counties, Grays Harbor.

"I really feel for a number of our insurance companies, because it's not that they don't want to be participating," said Michael Marchand, chief marketing officer of the Washington Health Benefit Exchange. "It's the uncertainty in the marketplace."

Insurers in the state are asking for a 22 percent increase for next year on average. States insurance officials say the carriers are trying to price in risk that they may not be reimbursed by the Trump administration for cost-sharing reduction subsidies that lower out-of-pocket costs for lower-income enrollees.

"As a result, we're seeing an increase in premiums because it's essentially the insurance companies hedging their bets that there may be the potential for them to have to pick up that CSR costs," said Marchand, referring to the subsidies.

For state regulators and insurers, the question of funding for the subsidies will be a key issue that will hang over rate reviews and the final push toward open enrollment just over four months from now.

"If a way is not found to pay them for 2018 there will losers, but no winners," said Hempstead. "The biggest losers will once again be the unsubsidized customers, who will be exposed to the entire premium increase with no relief."

For that reason Oscar's Schlosser is convinced the Trump administration and Republicans will find a way to fund the payments next year.

"From a common sense perspective, I really think when the dust settles, there will be a stable individual market. And compassion and reason will prevail on that," he said.