Anthem Withdraws from California's Individual Health Markets

Anthem has announced that they are pulling out of the individual market in 16 of the 19 health insurance regions in California, including all of Southern California. Notices were sent to policyholders informing them that if they get their coverage through Covered CA or even individual policies directly from Anthem without subsidies, their policies will not be renewed on January 1, 2018. This action will impact approximately 250,000 Californians who must switch to new insurers. The instability in the Covered CA marketplace is due to the political attacks on the ACA according to Gerald Kominski of the UCLA Health Policy Center, and other policy experts.  Click here to read LA Times article.

On the same day, Anthem announced its quarterly earnings, beating expectations by nearly 10%. Their stock price is up over 30% since January on the strength of their government business and small business plans. Click here for SF Gate article.

Some Bipartisan Support for Stabilizing Health Insurance Markets

Although Congress is on August recess, there is some bipartisan support to stabilize the ACA in both the Senate and the House. Lamar Alexander (R-TN), chair of the Senate Health, Education, Labor and Pensions, announced that his panel will work towards stabilization for 2018 when they return in September. The 23 members include several prominent Senators, including Bernie Sanders (I-VT), Elizabeth Warren (D-MA), Lisa Murkowski (R-AK), Susan Collins (R-ME) and Rand Paul (R-KY).

The Problem Solvers Caucus is leading the way in the House for bipartisan solutions for the individual markets as well. The 43 member group is made up of almost equal numbers of Republicans and Democrats. 

Most promising of all, the Senate and House groups have been coordinating efforts on similar quick-fix solutions that include (1) reinstating cost sharing reduction payments, (2) eliminating the medical device tax, (3) providing money and flexibility for states to further bolster their markets through reinsurance programs.

The pressure to act quickly is mounting as insurers announce 2018 rate increases as high as 40% in some states.  Health policy experts and insurers have stated that rate increases would only be in the single digits in many markets were it not for the uncertainty in the government's commitment to uphold the Affordable Care Act.

Even Health Insurers Oppose the Cruz Amendment

In an unusual move, health insurers have weighed in on the current Senate repeal and replace bill. They state that the Cruz Amendment, which would allow states to waive the 10 essential benefits coverage required under the ACA, would encourage healthy people to buy cheap policies and result in exorbitant premiums for people who would need the more comprehensive coverage. Without the individual mandate or the more comprehensive (and expensive policies), insurance companies would have less money to cover the expenses of the sickest patients.

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