Health insurance giant Anthem, Inc. plans to submit applications to participate in the 2018 Obamacare exchanges, but could make alterations or ultimately decide to pull out if lawmakers don't provide clarity on federal insurance payments and the health insurance tax, company executives said Wednesday.
Joe Swedish, Anthem's CEO, said during the company's first-quarter earnings call that if these items are not addressed then the company would re-evaluate its participation in June, which could lead to it requesting an increase in how much they charge for plans, exiting the exchanges or offering fewer plans. The company so far has remained in the Obamacare exchanges while other rivals like Aetna and UnitedHealthcare have fled.
"We plan to file preliminary 2018 rates with the assumption that the cost-sharing reductions will be funded," Swedish said of the insurance payments, which help reduce out-of-pocket medical costs for consumers.
He warned that if the subsidies are discontinued, then the company could raise its 2018 rates by 20 percent, and the health insurance tax, which was suspended this year, could raise rates by between 3 and 5 percent. A final decision on the exchanges will be made by the second-quarter earnings call, he said.
If Anthem ultimately exits exchanges in Colorado, Kentucky, Missouri and Ohio, then 255,000 people would not have insurers to buy tax-subsidized plans from unless another seller enters the exchange, according to an Axios analysis. Anthem sells plans in exchanges in 14 states, including in large markets like California and New York, under the Blue Cross Blue Shield name.
Swedish said Anthem was pleased with membership growth in the exchanges this open enrollment, and reported that claims were better during this first quarter than in previous years, though still higher than anticipated. Insurers often have said that people who sign up for the insurance exchanges have more expensive medical needs than other insured populations.
Anthem exceeded expectations in its first-quarter revenue, which climbed 10 percent to $22.32 billion because of price increases as well as growth in Medicaid and Medicare plans.
Insurance companies are in an era of uncertainty not only over the subsidies, which are facing a court challenge, but also over whether Republicans will be successful in gutting portions of Obamacare, which would affect not only the financial outlook of their business but the kinds of plans that they can offer customers. Anthem also has tried to proceed with a merger with Cigna, Inc., and filed a motion Tuesday to block Cigna from terminating the $54 billion deal.