Anthem pullout is troubling

Published 12:53 pm Wednesday, September 27, 2017

By Diana McFarland

Managing editor

A local insurance agent said that Anthem’s recent decision to pull out of the Hampton Roads area is a “catastrophic” decision for his customers buying health insurance on the individual marketplace.

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The move leaves those individuals with one choice — Optima, said Danny Hughes with the Hughes Agency in Smithfield. Hughes works with clients seeking insurance through the federal government’s marketplace.

The loss of Anthem includes Isle of Wight and Surry counties. 

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On top of that, Optima anticipates it will raise its premiums by 81.8 percent beginning in January, Hughes said, adding that final rates will be available at the end of the month.  

 Another wrinkle is that Optima works with Sentara Healthcare, meaning individuals with physicians at Riverside will have to find a new doctor or pay full price, unless it’s an emergency or life-threatening situation.

“It’s catastrophic,” said Hughes, adding that he has about 300 clients at his agency that will be impacted by this decision.

The move by Anthem does not affect employer-based groups or grandfathered plans, said Hughes.

With the open enrollment period beginning Nov. 1, Hughes is eager to get the word out about the change. The new rates take effect Jan. 1.

Barbara Campbell, an independent insurance agent in Smithfield, works primarily with health insurance and Medicare. She’s concerned that, in addition to the loss of Anthem, the open enrollment period has also been shortened to just six weeks, from Nov. 1 to Dec. 15. Previously, the period went to Jan. 31 with staggered policy start dates, Campbell said.

“For me that’s the scary part,” she said, fearing her clients will be unaware of the change and will end up without coverage. Campbell estimates that about 50 percent of her clients will be affected by the loss of Anthem.

The loss of Anthem leaves one local business owner in the lurch.

Prior to the passage of the Affordable Care Act, the business owner, who is a sole proprietor, was paying $500 a month for individual health coverage due to a pre-existing condition. When he signed up for coverage on the ACA exchange, it went down to $28 a month and is now $68 — still a bargain as far as he’s concerned.

“That was like hitting the lottery,” he said.

The loss of Anthem, and the anticipated rate increase by the only insurer left — Optima — is disconcerting.

“I guess this party’s over now,” he said, adding that he can probably absorb the increase but it will be unpleasant. What worries him is how the pre-existing condition will be treated.

 The mixed messages over the past few months had Optima leaving some parts of Virginia, following Anthem’s decision to no longer provide plans on the federal Affordable Health Care exchange. Anthem then decided to stay in the market, but only in counties and cities where other insurance carriers were not available, said Hughes. 

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It was a “mercy thing,” Hughes said.

Anthem left the Hampton Roads area because Optima is available, he said.

Anthem cites uncertainty in the health care insurance market as the reason for its withdrawal.

The number of cities and counties offered on and off-exchange plans through Anthem fell from 128 to 68 for 2018, according to Anthem.

Aetna and United Healthcare have also left the state.

Congressional Republicans are into their third attempt this year to repeal and replace the Affordable Care Act, or Obamacare, a promise they have steadfastly clung to for seven years, but so far, have been unable to achieve.

Hughes said the Trump administration needs to support the ACA to remove the uncertainty, and should continue to pay promised subsidies to insurance companies so they can continue to provide coverage to lower-income individuals.

The government keeps making threats and the insurance companies can’t play this game, Hughes said.

Campbell is leery of the latest attempt to repeal and replace — the Graham-Cassidy bill — which would thrust a good deal of healthcare plan decisions onto the individual states.

“We’ve been put in this position and don’t know what’s going to happen with next week’s vote,” said Campbell on Friday.

The Graham-Cassidy bill appeared to be failing as of Tuesday.

Hughes said the stiff increase anticipated for Optima policy holders can lead to an individual now paying $500 a month for coverage to $900, or a family, who could see their rates go from $1,300 a month to $2,000.

However, those making within a certain income range may be entitled to subsidies if purchasing a plan on the exchange, which puts a cap on the amount the rate can increase, Hughes said.

That can drop the potential 82.8 percent increase to as low as 1.5 percent — part of the “affordable” in the ACA, Hughes said.

An individual making up to $48,240 a year, or a family of four making from $24,600 to $98,400 a year is eligible for a subsidy with Optima, according to the company’s website.

Being down to one provider is also a problem for many local small businesses that dropped group health insurance plans in favor of its employees seeking coverage on the individual marketplace, Hughes said.

When the ACA passed in 2010, that move seemed like a win-win at the time, Hughes said.

Now, businesses could see a loss of employees who leave their jobs in search of one that offers group health insurance, he said.

Another problem looming is that many people make too much money to purchase health coverage on the exchange and will have to buy individual insurance policies directly from insurers — an expensive proposition, Hughes said.

The criteria for purchasing insurance on the exchange is based primarily on household size and income, Hughes said.  

Free insurance symposium

The Hughes Agency is offering a free informational event about health care coverage on Tuesday, Oct. 24, 6-8 p.m. at The Smithfield Center. The symposium is designed for individuals with care under the Affordable Care Act or plan to enroll in a plan for 2018. The symposium will also cover employer/group coverage for small businesses, as well as Medicare, Medicaid and FAMIS. Also this year, the open enrollment period has been shortened to six weeks, from Nov. 1 to Dec. 15. After Dec. 15, individuals will not be able to purchase a plan unless he or she has had a qualifying event, such as the birth of a child. The event is free and open to the public.