Insurers in the Wisconsin Exchange
As federal efforts to repeal and replace the ACA stall, and amid discussions about defunding cost sharing reductions (CSRs), the first week of August (2017), Molina announced it will no longer offer health plans on the Wisconsin insurance exchange and preliminary premium rate increases show many benefit plans with double digit increases over 2017.
Molina announced August 2 that it planned to exit the exchange market in Wisconsin beginning in 2018. This comes after two other insurers in Wisconsin - Anthem and Health Tradition Health Plan – decided earlier this year to discontinue offering individual market plans in 2018. Molina currently sells exchange plans in 30 counties, and Anthem offers plans in 34 counties. Importantly, however, these two insurers’ offerings overlap in 23 counties in Wisconsin. Absent other carriers stepping in to fill the gap, these departures mean that one county – Menominee – will have no insurer offering coverage in the exchange in 2018, and 10 Wisconsin counties will have only one insurer participating. See the table and heatmaps for a summary of possible changes by county for 2018.
Even with these announcements, however, Wisconsin still has one of the most competitive insurance markets in the country. The fact that residents in most counties will still have a choice between two or more insurers is positive, and far different from many of Wisconsin’s neighbors. Iowa for example, is seeing the possibility of no insurers across the state participating in the exchange. Most, if not all, of the 11 remaining insurers in Wisconsin are more local or regional community based plans, many of which originated in the state.
However, there are other signs that the markets are at risk. This week, the Centers for Medicaid and Medicare Services (CMS) released the preliminary rate filings for health plans for 2018. While these are preliminary, the rate filings for Wisconsin insurers participating in the exchange indicate premium increases could range from 0 up to nearly 50 percent, depending on age and geography. Many of the health insurers cited various market dynamics as rationale for the increases including: market uncertainty, risk, defunding the CSRs, lack of enforcement of the individual mandate; and the reinstatement of premium tax. Some also pointed to a modification in the age rating curve published by the federal government last September which results in higher premiums for individuals under the age of 20 beginning with the 2018 benefit year.
Adding to uncertainty is the question over whether the Trump administration or Congress will continue funding CSRs. About 125,000 people in Wisconsin enrolled in exchange coverage currently qualify for these subsidies. The effect of defunding the cost sharing subsidies, however, does not fall only on these individuals. Rather, because insurers would still be required to pay for the cost sharing subsidies without federal funding, insurers have signaled they will either have to raise premiums or choose to exit the market. Thus, the immediate impact of the federal government withholding funding for CSRs is on the overall stability of the market which could jeopardize coverage for all exchange enrollees. This in turn, has a broader impact on overall coverage expansion in Wisconsin.
In a statement released August 4, 2017, WHA President/CEO Eric Borgerding said WHA agrees with the National Governors Association Health Committee, who urged urged the Administration to ‘fully fund cost sharing reductions (CSRs) for the remainder of calendar year 2017 through 2018. This is a necessary step to stabilize the individual marketplaces in the short term as Congress and the Administration address long-term reform efforts.’
According to Borgerding, “One of the primary reasons Wisconsin rejected Obamacare Medicaid expansion and disenrolled some 60,000 from the program was the existence of subsidized coverage on the exchange. That affordable coverage is a fundamental and intentional component of Wisconsin’s unique approach to coverage expansion. As go the cost sharing subsidies, so goes the viability of Wisconsin’s exchange and that part and parcel component of the Wisconsin coverage model. Under the Wisconsin Model, our uninsured rate has been cut nearly in half since 2014. We have much at stake in what comes next, and something must come next. Inaction is not an option nor is intentionally allowing failure of insurance markets an acceptable strategy or outcome.”
Effect of Announced Changes on Number of Insurers Participating in the Wisconsin Insurance Exchange by County, As of September 15, 2017
Number of Insurers Participating in the Insurance Exchange in Wisconsin (2017 v 2018)