Wellmark Blue Cross Blue Shield announced that it would not be participating in Obamacare’s Iowa exchange next year, citing $90 million in losses during the last three years.
The company said in a statement that its customers had endured “double-digit premium increases” and noted that 21,400 Iowans would be affected. Wellmark Chairman and CEO John Forsyth also hinted that the uncertainty over how former President Barack Obama’s healthcare law would be affected in coming months had contributed to the company’s decision.
“Finding solutions to stabilize this market is in the best interest of all Iowans, including providers of healthcare and insurance carriers,” Forsyth said. “No one really benefits from rising costs. While there are many potential solutions, the timing and relative impact of those solutions is currently unclear. This makes it difficult to establish plans for 2018.”
In considering whether to participate in the exchanges next year, health insurers are weighing a variety of factors, including whether Republicans will be successful in gutting Obamacare and to what extent the Trump administration will provide them with federal payments that help compensate them for their losses.
Insurance companies also are dealing with the fallout from their decision to underprice their plans when they initially decided to participate in the Obamacare exchanges, and the programs have struggled to enroll an adequate portion of younger, healthier customers who help create balanced risk pools.
Wellmark left the exchange in South Dakota — the only other state where it participated in the individual exchanges — last year and joins other insurers in deciding not to participate in the exchanges in 2018. Humana announced a similar decision last month, citing an estimated $45 million in losses expected this year. Other insurers have until June to file rates for next year, though they can still make a final decision in October about whether they want to proceed with selling plans.
Wellmark’s decision affects 1.3 percent of its 1.66 million total customers in Iowa, given that many of them are enrolled in plans through an employer or through plans that were sold prior to Obamacare going into effect.
Medica, Gunderson Health Plan and Aetna also sell plans in the Iowa marketplace, though one or more could exit, while another insurer could decide to enter. Shrinking options on the exchanges can result in higher premiums or and fewer options, ultimately reducing access to healthcare providers that customers might prefer.
