Another one bites the dust.
Iowa’s dominant health insurer has announced it will stop selling individual policies for 2018 to recover from tens of millions of losses from its participation in the Affordable Care Act (ACA).
Wellmark Blue Cross & Blue Shield’s decision will affect more than 21,000 Iowans who bought health insurance policies from 2014 and means they will need to find another carrier.
The
Des Moines Register reported that Wellmark president John Forsyth said the company has lost $90 million in the past three years to provide coverage for policyholders and that its decision was “painful but necessary.”
Forsyth explained that much of the problem comes from the fact that too few healthy young people are in the pool, with older Iowans who suffer from chronic and costly problems comprising the bulk of the market.
“You’ve got to get those healthy people in the pool to make this work,” he pointed out.
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However, the announcement will not affect most of the 1.6 million Iowa residents who have bought Wellmark insurance, which includes policies acquired through their employers, the publication said. There are also 77,000 policyholders who are safe because they bought insurance prior to 2014.
While Forsyth said his company is still open to the possibility of getting back into the Iowa health insurance pool in the future, it is firm about taking a breather in 2018.
Wellmark’s exit leaves Iowans with options limited to national carrier Aetna and Minnesota-based Medica. Wellmark dominates the state’s health insurance market, accounting for roughly 75% of policyholders.
Iowa insurance commissioner Doug Ommen said in the same report: “We are very concerned about this development.”
Meanwhile, Cynthia Cox, a national health care analyst, observed that such a trend is emerging across the country. She said that the circus surrounding the national health care system, which recently concluded in a Republican pull out of a bill proposing an overhaul to the ACA, is spooking the industry.
“That uncertainty makes insurers very nervous,” Cox pointed out.
In addition, Forsyth suggested that the government needs to undertake reforms to fix the healthcare system to achieve its goal of providing universal coverage. Among his recommendations are the setting of a cap to coverage and putting up a system for expenses that exceed $100,000 a year for sick policyholders, which he said would greatly help in stabilizing the ACA exchanges.
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