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Q&A: Health Policy Expert On ACA Insurer Withdrawals

Insurance providers MDWise and Anthem announced this week they are dropping out of Indiana's Affordable Care Act exchange system. Health policy expert Seth Freedman explains the impact this will have on Hoosiers' health insurance options.

This conversation has been edited for clarity and conciseness.

Q: Why did MDwise and Anthem drop out of Indiana?

A: Well there's been a lot of flux in the insurance exchanges this year, but in the past couple of years as well, a lot of companies across the country [are] dropping out, some entering, some changing which states they're interested in participating in.

A lot of it has to do with the fact that the companies have not been as profitable as they might've hoped when they first entered these marketplaces. There have been some policies to try to cushion those losses of profit but there's been a lot of uncertainty with those policies of late and so I think a lot of companies are just sort of feeling that they don't want to stay in this market where there's a lot of uncertainty about what they'll be like going forward and what the markets will look like going forward and so they've decided to step out.

Q: What options are left for Hoosiers that are trying to get coverage under the ACA?

A: This change doesn't affect anybody who gets insurance through their work, it doesn't affect anybody who gets insurance through Medacaid or HIP 2.0. So it only affects those people who are buying insurance on these ACA-related marketplaces.

And what this means is there are two companies left offering insurance on these exchanges. One is called Centene and the other is called CareSource. What it means is that Hoosiers will only have those two choices of firms in most counties in the state.

"[For] most people it won't affect the price that they have to pay for their premium that much, but it will affect the types of plans and the choices of plans that are available to them."

Q: What happens to people who are currently insured under Anthem or MDwise?

A: Their insurance will continue through the end of 2017 and then in the fall and winter when the open enrollment for the marketplace for 2018 begins, they'll have to shop for a new plan. That's when they'll see only those two firms as choices available when they shop for a new plan for 2018.

Q: After this change, do Hoosiers have fewer healthcare options than other states?

A: I would say that going into this having three to four choices in most counties, Indiana is pretty similar with the majority of states. I'm not exactly sure how this number will compare to other states because the other states have been having similar things happening right now, so in the next couple weeks we'll have a better landscape of what's going on across the board.

Q: Are other insurance providers expected to drop out after this news?

A: No, I think we're set for 2018. Things might change a year from now but for 2018 these two firms [Centene and CareSource] will stay in. What happened was this week was the week that all insurance companies had to file whether or not they were going to be in the market and what rates they were going to charge. And so I think while they happened right at the same time, they were in the works for awhile.

Q: Will this news at all impact the debate on the AHCA, which the Senate just released today?

A: I don't think it'll impact the debate, I mean I think that the proponents of the AHCA are pointing to things like this that have happened in Indiana and other states as reasons why the Affordable Care Act should be changed or repealed.

It's a little awkward because a lot of the reasons that these companies have pulled out are in response to the policy uncertainty because of the debate about the AHCA. But I don't think it directly impacts the debate. I mean, it certainly suggests that these markets aren't working perfectly right now. Part of that is because of potentially some of their design features and part of it is because of what's been going on in politics.

Q: Will this impact Hoosiers with private insurance?

A: It only impacts those who are buying insurance on these marketplaces, it doesn't affect anybody who is getting insurance through their employer or other public sources like Medacaid.

Q: Will this impact HIP 2.0?

A: No, HIP 2.0 will continue and MDWise, for example, is continuing to provide insurance plans through HIP 2.0 and so that won't be changed by this announcement.

Q: What is the long-term impact of the change?

A: It'll have a couple of different impacts on people who are buying marketplace choices. So they'll go onto the website when they go to buy insurance for 2018 and they'll see choices from fewer companies. What that means is that they might've been in a plan that was designed with the deductible and premiums the way that they liked it and maybe that plan isn't available anymore and maybe they have to choose a plan with a higher deductible or a network that doesn't cover the doctor that they've been seeing. So there will be changes to the choices that insurance shoppers have and that might lead them to not have as good of choices for them as they had before.

Over the long-run it may make prices increase since there's simply less competition. It's important to note that when prices go up, most people buying insurance on these marketplaces get a subsidy to help them purchase their plan and the subsidies are designed through the Affordable Care Act so that when prices go up, the subsidy goes up as well. So most people it won't affect the price that they have to pay for their premium that much, but it will affect the types of plans and the choices of plans that are available to them.

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