Anthem said Friday that it would continue to offer insurance plans for Kentuckians who get health coverage through the Affordable Care Act, a decision that prevents the state’s individual market from collapsing. The Indianapolis-based insurer is the only company to offer ACA plans in about half of Kentucky’s 120 counties.
However, Anthem also has asked the Kentucky Department of Insurance to be allowed to raise its rates for 2018 by 34.1 percent.
The announcement and request affects only those 78,800 Kentuckians who get their insurance on the federal health care exchange — not those who get insurance through employer plans.
The federal and state exchanges – Kentucky had one called Kynect, established under former Gov. Steve Beshear, but dismantled under Gov. Matt Bevin – are a central part of the ACA, known informally as Obamacare. They allow people who do not have access to health care through their employers to sign up for insurance plans and federal subsidies.
However, in the last two years, some insurers, including Louisville-based Humana, have said that the exchanges are primarily attracting sicker people whose health care premiums are not enough to pay for their health care.
Humana said that it lost hundreds of millions of dollars from ACA customers last year. The company will no longer offer any plans on the exchanges for next year — but that impact on Kentucky was muted, as the insurer offered plans in less than a dozen counties here.
Indianapolis-based Anthem, on the other hand, this year is the sole provider of ACA plans in about half of the state’s 120 counties. If Anthem had exited the Kentucky market for 2018 – as it did recently in Ohio – many Kentuckians on ACA plans this year would not have had access to any such plans for next year.
Anthem has changed its cost structure in part by making changes to the networks in which people can access doctors under their insurance plan.
The only other insurer that will offer plans to Kentuckians on the exchanges will be Dayton, Ohio-based CareSource, which has requested that it be allowed to increase its premiums by 20.8 percent.
The Kentucky Department of Insurance will analyze the rate requests and decide by Aug. 16 whether they’re warranted. The department can approve, lower or raise the rates. Individual premiums will depend on factors including age, smoking habits and geographic location. Enrollment for the 2018 plans will begin on Nov. 1
DOI Deputy Commissioner Patrick O’Connor told Insider that while insurers continued to struggle in the individual market and significant uncertainties remain, the department was pleased that, at least at this point, Kentuckians in all counties would have access to exchange plans.
“The department has really been working proactively to try to do whatever we can within our federal constraints to make sure that Kentuckians have options for coverage,” O’Connor said.
For example, the department moved the deadline by which insurers had to file rate requests from May 17 to June 7 to give the companies additional time to analyze the market and react to potential federal legislation.
Uncertainty remains, O’Connor said, but at least Kentuckians will not face the same struggles as people in some other states who do not have access to any insurance plans.
Anthem told Insider via email that its rate increase request of 34.1 percent reflects “the increases in the cost of delivering medical services coupled with pharmacy expenses and overall increased use of health care services by Anthem members in ACA plans.”
The company also warned, however, that it might adjust its request — and its participation in the Kentucky market — in response to legislative changes, especially if the U.S. Congress eliminates or significantly lowers subsidies that help people buy health insurance.
The U.S. Congress for months has been debating a repeal of the ACA. While the U.S. House has passed a repeal bill, the U.S. Senate proposal has not received a vote, because too few Republicans support it. All Democrats oppose repealing the ACA, which is President Barack Obama’s signature health care legislation.
“Without certainty of funding before final decisions need to be made for 2018, Anthem will need to evaluate appropriate adjustments to our filings such as reducing service area participation, requesting additional rate increases, eliminating certain product offerings or exiting the Individual ACA compliant market in Kentucky altogether,” the company said.
O’Connor said that if additional insurance companies leave the Kentucky market, the state will implement some stop-gap measures to curtail any impact on ACA customers.
“We have a number of options that we’re looking at,” he said.