A nasty little crack has shown up in Washington’s health insurance market, one that could have serious implications in the debate over the Affordable Care Act in Washington.
State Insurance Commissioner Mike Kreidler announced on Thursday that, at present, there are two counties in Washington—Grays Harbor and Klickitat—where no insurance companies intend to offer individual plans in 2018. Kreidler’s office said there are currently 1,119 people in Klickitat County and 2,227 people in Gray’s Harbor County signed up in the individual market. If no insurance companies step up, the enrollees within those counties who are not eligible for Medicaid or Medicare and do not have access to insurance through an employer would need to get insurance through the state’s high-risk pool, where premiums start north of $1,000 a month. Worse, these people will not be eligible for the federal premium subsidies that are a key part of Obamacare’s effort to extend coverage to all Americans.
The Insurance Commissioner’s office says that, under such a scenario, many people will simply go without health insurance.
The situation is a Rorschach Test for how people feel about Obamacare. For those opposed to the landmark health care legislation, this may be the strongest evidence yet that its blend of stricter regulations on insurance companies paired with federal subsidies to keep premiums in check is not sustainable in Washington. But those who support the plan see the faltering of the individual market in the rural counties as evidence that Republican efforts to undermine the health care law are harming state residents—who have seen their uninsured rate drop 60 percent since the Affordable Care Act went into effect.
“There’s been deliberate sabotage of the Affordable Care Act, not just this year but in years past,” says Steve Valandra, a spokesman for Kreidler. “The commissioner has said repeatedly that the ACA is flawed and needs fixes, just as they fixed Social Security and Medicare [after those programs were first passed]. But there hasn’t been any willingness to fix the Affordable Care Act.”
Additionally, there are reports out of D.C. that the Trump administration is seeking to end so-called “cost-sharing reductions,” which are paid directly to health insurers to help keep premiums down. Some have compared eliminating the payments to “lighting the fuse” that could blow the ACA to smithereens. The idea that the government might stop the payments caught the ire of health insurers, as well as the U.S. Chamber of Commerce, which cautioned the Trump administration in a letter that stopping the payments could have dire effects on people on the individual markets.
The Trump administration has also vowed to not enforce the individual mandate, leaving insurance companies with a pool that is likely to skew toward sick Americans who will ultimately cost more to cover.
“Obviously, if the money doesn’t come from the federal government, and the administration doesn’t enforce the individual mandate, it’s going to have an effect,” Valandra says.
However, one of the insurance companies that is pulling out of Grays Harbor and Klickitat Counties is not fully backing that narrative.
Melanie Coon, a spokeswoman for Premera/LifeWise, says “federal uncertainty is just part of the story,” and that a range of factors led the company to pull out of those particular counties while staying in 23 others, many of them rural. In a statement, the company said: “Our decision to no longer offer individual health coverage in certain counties will help us keep cost increases lower for customers in other counties.” In other word, for one reason or another, offering insurance in those counties wasn’t penciling out.
Kreidler shot back at that in the Seattle Times, suggesting that the insurance company is being politically correct and does not want to anger the party in power in the other Washington.
Whatever the case, there’s still time for another insurer to step in and offer plans in those counties before 2018 arrives. Valandra says they are working now with insurance companies to see what can be done.
The debate could heat up again later this month, when the commissioner’s office releases proposed rate increases for insurance plans in the state. If there is a big jump in cost, you can be sure that, once again, the cause of the spike will be in the eye of the beholder.