Blue Cross and Blue Shield in New Mexico will leave the Obamacare exchange because of high costs and an unwillingness from regulators to charge higher premiums.
The insurer announced the decision Thursday, saying that the prices it charged for health insurance in 2014 and 2015 did not cover its costs and caused the insurer to lose $19 million last year.
The decision could have lasting ramifications if other insurers decide to also exit the Obamacare exchanges. If the cost of insurance becomes too high for insurers, then they could opt out of the Obamacare marketplaces, potentially restricting the types of plans offered by the marketplace, if any at all.
The reason for Blue Cross and Blue Shield's exit appears to be a disagreement over insurance rates.
Blue Cross and Blue Shield said it wasn't able to reach an agreement with New Mexico regulators that would have allowed the insurer to continue to offer coverage with rates that would be adequate to cover its costs.
The insurer initially wanted a 50 percent increase.
Insurance premiums have become an important battleground recently as states move to finalize rates with insurers for Obamacare marketplaces.
California recently announced a 4 percent average increase in Obamacare premiums, and Florida announced a 5 percent increase as well.
Florida, Rhode Island, Kentucky, Oregon and Michigan are the only states to have released final rates for all insurance plans.