Repeated financial losses are forcing North Carolina’s largest insurance company to consider exiting the state’s Affordable Care Act market next year, the group’s chief executive said.
Blue Cross and Blue Shield CEO Brad Wilson told News & Observer reporters Wednesday that the insurer is facing reporting its second consecutive financial loss in coming weeks due to cost overruns under the ACA. Unable to continue sustaining such financial losses “indefinitely” in the state, Wilson says the carrier may decide later this year to get out of the market altogether.
The losses come even after Blue Cross raised rates by an average 32.5% in the state in a bid to stem losses.
“We can’t offer something for sale in this marketplace that we know every time it’s purchased we’re losing money,” Wilson said.
The chief executive is hardly alone in publicly expressing his doubt about the success of the healthcare law, though it marks a departure for him and for Blue Cross. Previously, the insurer had stood stalwart in its commitment to both the ACA and North Carolina.
If Wilson makes good on his warning, more than 300,000 North Carolina residents would lose their insurance and be forced to either find a new federally subsidized policy or go uninsured. The exit would be particularly troublesome for the state as Blue Cross is the only insurer currently offering coverage in all of North Carolina’s 100 counties.
Whether that exit takes place will likely depend on the size of the rate increase approved by the state’s Department of Insurance later this year. Wilson says he will use that figure to determine whether the increases “make sense” for the company.
“If it does, then we’ll move forward,” he said. “And if it doesn’t, then we’ll react accordingly.”
Wilson’s comments come in the wake of a letter sent by North Carolina Insurance Commissioner Wayne Goodwin to US Secretary of Health and Human Services Sylvia Burwell last week, in which Goodwin expressed his concern that all three insurers offering subsidized policies in the state would leave the market.
Already, all three have cut back on sales commissions to agents and brokers who sell ACA policies. A full retreat would leave thousands with no options for subsidized coverage.
Blue Cross is expected to report its 2015 financials next month. This is the second year the insurer has participated in the ACA marketplace.
