North Carolina’s top insurance regulator is publicly blaming the Affordable Care Act for “destabilizing” the state market and deterring carriers from selling individual policies.
Insurance Commissioner Wayne Goodman sent a letter this week to Health and Human Services Secretary Sylvia Burwell warning that health reform is driving up insurance costs, reducing consumer options and making it impossible for insurers to sell profitably sell policies in North Carolina.
Most recently, he said, all three insurers on the federal insurance exchange have eliminated agent commissions for selling individual policies in the state.
“Insurers cannot continue to have annual losses in the hundreds of millions and be expected to continue ‘business as usual,’” Goodwin wrote in his letter to Burwell. “I am highly concerned insurers may withdraw from the individual market in North Carolina altogether…if North Carolina continues along this path and we have no carriers, what do we do?”
Goodwin added that the number of insurers offering individual coverage in the state has decreased from 29 to 8, while those offering small group coverage dropped from 27 to 10. Total plans on the individual market have also dropped, falling from 1,700 to 683.
The three-page letter was a follow-up to a conversation between Goodwin, a Democrat, and Burwell that took place in November.
The concerns come even as North Carolina reported the third-highest ACA enrollment in the country and insurers have raised rates by an average 27%.
Blue Cross, the state’s largest insurer, lost $123 million on ACA policies in 2014 and is expected to report another, similar loss in 2015. Nationally, UnitedHealthcare expects to lose nearly $1 billion on ACA policies in the first two years and has publicly threatened to leave the market next year.
At least one analyst dismissed the concerns expressed in Goodwin’s letter. Adam Linker, a health policy expert with the North Carolina Justice Center in Raleigh, told the News Observer that despite the troubles occurring in the state, the letter “seems unnecessarily alarmist.”
“Having a lower uninsured rate and fewer products is better than having fewer products and more uninsured people,” Linker said.
Washington & Lee University law professor Tim Jost also stressed that the loss of carriers in the state mostly centered on small, niche players rather than those with real market weight.
“Frankly they were bottom feeders, offering low-quality plans,” he said. “The fact that some carriers left the market doesn’t mean the market is worse off without them.”
