King and Queen
Source: Virginia Bureau of Insurance
As insurer after insurer has dropped out of the individual market, more than 66,000 residents in 58 Virginia cities and counties could be left with no coverage and no options next year.
State officials are scrambling to lure an insurer to fill the gaping holes in the Affordable Care Act's exchanges, but even if they find companies, premiums are likely to skyrocket. And unless conditions change, the state seems likely to face the same problem in coming years.
"Knowing that filing deadlines were a week ago Monday, it's not entirely clear how we bring plans in at this time," said Virginia Secretary of Health and Human Resources Bill Hazel. "We have worked with, frankly, all the plans that remain and I've talked to Anthem leadership as well and I know that several of them are looking at how they can get in and help us with some of the bare spots."
Along with Hazel, the state's Bureau of Insurance is trying to find an insurer to fill in the empty counties, but the outlook is bleak.
"I'm hopeful, but I wouldn't say I'm optimistic," Hazel said.
Virginia is the only state in the nation in which, as of Wednesday, some counties will not have any insurance options on the marketplace next year, according to data from the Centers for Medicare & Medicaid Services.
One company has stepped forward so far. Hampton Roads-based Optima Health, which earlier this month announced plans to scale back its participation in the individual market, had a last minute change of heart, filing with the state Bureau of Insurance on Tuesday to cover an additional five counties, Page, Madison, Southampton, Louisa and New Kent, along with the city of Franklin.
Those six municipalities, Optima President and CEO Michael Dudley said in a statement, represent 5,000 additional people who were nearly cut off from the market.
Even with Optima's increased participation, dozens of localities remain uncovered. Last year, more than 66,000 individuals purchased marketplace plans in those 58 municipalities, according to data from the Centers for Medicare & Medicaid Services. Portions of five other localities are also without coverage. Those residents could soon add to the ranks of Virginia's uninsured.
"We're talking about people's health and their lives, access to medicine and health services," said Jill Hanken, a lawyer with the Virginia Poverty Law Center and director of Enroll Virginia, a statewide insurance enrollment navigation program.
In a statement, Ken Schrad, spokesman for the State Corporation Commission, said the Bureau of Insurance is in serious discussions with insurance carriers and that it is "hopeful its diligent efforts will provide the best possible outcome for Virginians."
Huge swaths of Virginia, especially in the southwest, will be left without any plans should the state fail to lure an insurer in before the deadline of Sept. 27. The insurer must also have its rates approved by the Bureau of Insurance by that day.
Though Optima was the latest insurer to drop some of its coverage in the individual market earlier this month, it followed in the footsteps of massive insurers such as Anthem, Aetna and UnitedHealthcare.
"Really, the big problem was when Anthem pulled out, because Anthem had 200,000 enrollees," said Carolyn Engelhard, director of the health policy program in the Department of Public Health Sciences at the University of Virginia School of Medicine.
Virginia's two biggest problems, Hazel said, are the timing and uncertainty over federal cost-sharing reduction payments designed to make insurance affordable for the poor.
Though other states - such as Nevada and Ohio - have been in similar situations, their crises occurred earlier this year. Virginia is down to the wire, with little time to sign up an insurer if one steps forward.
Meanwhile, in the wake of Congress' numerous attempts to knock down the ACA, the individual market has floundered. The federal government has not promised to pay the cost-sharing reductions that the law requires insurers provide to low-income members, and not enough healthy people have signed up to offset the cost of insuring sick people.
The market has proved too volatile to warrant participation on the part of insurers, and most health policy experts agree that something must be done at the federal level before the market will stabilize.
"We know what to expect of time, we don't know what to expect from Congress," Hazel said.
People who buy plans off the exchange - meaning they pay full price without federal subsidies - likely will see their choices eliminated and premiums jump.
Engelhard said that because those people will have the burden of skyrocketing premiums, but not the benefit of subsidies to help them pay for it, many are likely to end up among the uninsured.
Richmond resident Jill Tarr has survived a lot: getting hit by a car while on her bike, a brain injury and a diagnosis of terminal lung disease.
She knows what it is to fight for her well-being.
But now she has only one option ahead of her: Cigna - the only insurer available on the individual market in Richmond - and its 44 percent average premium increase.
The likelihood that she will be able to keep her providers - the main reason she originally chose not to buy a plan on the exchange - is slim, she said.
If Cigna decides to follow in the footsteps of Anthem, UnitedHealthcare, Aetna and Optima, 64-year-old Tarr will be entirely out of options. She'll have to abandon retirement and go back to work, or cross her fingers and hope she can make it until she qualifies for Medicare at age 65 next year.
"They are changing my life decision for me," she said.
While Richmond and Henrico, Chesterfield and Hanover counties will all have at least one option next year, Cigna reported in its rate filings to the Bureau of Insurance that its minimum premium increase will be 27.8 percent for some plans, with the price of at least one option nearly tripling.
Hiked premiums have been a theme of the individual market over the last year, and are likely to continue.
Should a company decide to swoop in and cover the 58 uncovered municipalities, it would be able to charge high premiums, Engelhard said.
"If a significant number of people in those markets get Obamacare subsidies, then the insurers can come in at almost any premium price," she said. "On the exchanges, up to 85 percent of subscribers get subsidies - so they can come in and they can price their product pretty high and the people who get the subsidy, all they will see is the amount they pay based on their income."
The government would take the brunt of that premium hike, "which means the taxpayers will," Engelhard said.
Based on what has happened in other states like Nevada and Ohio, it appears likely an insurer would be interested in picking up Virginia's municipalities - if it can beat the deadline.
But meanwhile, the Centers for Medicare & Medicaid Services, a federal agency, has slashed funds for navigator programs that help people through a sometimes confusing enrollment process.
Enroll Virginia, the statewide federally certified navigator project, has not received funding since Sept. 2, Hanken said. The pool of grant money was cut to $36.8 million from $62.5 million.
On top of that, the open enrollment period this year has also been slashed in half by the federal government, from 90 to 45 days. And the advertising shrunk from $100 million to $10 million.
The cuts are especially worrisome, Hanken said, because with all the insurers dropping out, most enrollees will have to make new decisions, and likely require help.
"It won't be as easy this year to just simply renew coverage. People will need to choose a new plan and everyone needs to carefully review the list of providers and formularies to make sure they're buying something they can use," Hanken said. "We have a big job ahead of us this year in open enrollment and the delay in funding is problematic."
Not informing people about their options could make the future of the individual market even bleaker. If they don't know about their options, healthy people are less likely to sign up.
"The problem is that, without the money going toward enrollment efforts, there is no guarantee that even if people come in to cover the bare counties that healthy people will sign up," Engelhard said. "That's the risk; that's the gamble. You can make money in Obamacare if you get people who have large subsidies and they have these (cost-sharing reductions), but you can't if the only people who sign up are sick."
Hazel said he knows of a woman who buys insurance on the individual market and has to get a lung transplant, which will require her to be on medications for the rest of her life. It is unclear what will happen to her when her current plan ends on Dec. 31, or if she will be able to get the life-saving procedure at all.
Hanken said she is worried about each county and city that could go without coverage next year, but especially the individuals within those municipalities who will suffer because of it.
"I'm concerned about every single one," she said.
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