Texans are now worried that they will have even fewer and more pricey individual health plan options in 2017 with the withdrawal of yet another insurer from the exchange. It has reached such a point wherein a good portion of the state will only have one exchange-based insurance carrier to purchase plans from next year.
On Tuesday, Oscar Insurance announced that it would partially exit from Texas’ federal health insurance exchange next year, citing the unsustainability of the marketplace. Oscar joins a growing list of major insurers—Aetna and UnitedHealthcare, among others—who have not only announced their exit from Texas’ exchange by 2017, but also from the marketplaces of other states. Cigna, another major insurer, also has plans to cut loose, having revealed to the Houston Chronicle
recently that it is in talks with state regulators about exiting Texas’ exchange.
Scott & White, a health insurer based in Texas, also has plans to withdraw from the health insurance marketplace next year.
The federal marketplaces were created under President Obama’s Affordable Car Act (ACA).
The planned exits have only served to exacerbate the problem, with Texas’ remaining insurers opting to either withdraw similarly, or to raise their premiums accordingly.
“I think what we should be expecting is premiums that are substantially higher, and I think there’s a real risk that other insurers pull out,” Texas A&M, University School of Public Health professor Michael Morrisey told WFAA.com
. “We may be beginning to see the death spiral of insurance plans in the exchanges.”
Blue Cross Blue Shield of Texas, one of the few insurers in the state yet to announce anything about leaving the exchange, is requesting regulators to allow rate hikes by up to 60% next year. The insurer noted that its financial losses in the marketplace were uncharacteristically large, hence the hikes. The losses were so large, that Blue Cross had ceased offering one of its plans in Texas last year, which covered 367,000 consumers.
Edna Perez-Vega, a spokeswoman for Blue Cross, said Tuesday that the insurer had made "no final decisions" about its offerings next year.
"We have been in this market for 80 years and, while some carriers have chosen to exit the market, we are working towards continuing to provide health insurance options for Texas consumers," she added. Vega remarked that the insurer had lost $770 million in 2015.
According to a study published Aug. 19 by Avalere Health, a health care consulting firm, over a quarter of Texas’ 26 federally designated geographic areas potentially only have one insurer to purchase plans from on the exchange next year.
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