Centene rescuing Obamacare as just two US counties still lack insurers for 2018.

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The News:

Centene Corp. (St. Louis MO) on Tuesday (August 15, 2017) said it will sell Obamacare plans in Nevada’s remaining 14 “bare” counties in 2018. The insurer previously announced it would sell Obamacare coverage in counties elsewhere that were at risk of having no insurer.

That means there now are fewer than 400 people who currently buy Obamacare coverage though the federal HealthCare.gov marketplace in the two counties, in Ohio and Wisconsin, that remain at risk of not having an insurer next year, according to a map maintained by the Kaiser Family Foundation.

“This is not even a fraction of a percentage of the people” in the US, said Cynthia Cox, associate director for Kaiser’s Program for the Study of Health Reform and Private Insurance, CNBC reported.

In late June, according to federal health officials, there were 49 counties nationally that did not have an insurer committed to sell plans on a government-run Obamacare marketplace in 2018. But since then, the number has fallen as insurers have agreed to offer coverage in most of those areas.

Centene alone has been responsible for offering coverage in more than 40 previously bare counties in 2018, including 25 counties in Missouri alone.

“This is very good news for people who are getting insurance in this market,” Cox said of Centene’s move in Nevada, which guarantees that more than 8,000 current Obamacare exchange customers will have an insurer to offer plans. “It appears at least at this point that most, if not all people will be able to get insurance in this market,” she said, noting that she has heard rumors that Wisconsin’s Menominee County will soon get an Obamacare insurer.

There were just 47 people who bought an Obamacare plan on HealthCare.gov in Menominee County this year.

“I think what this has shown is that the ACA [Affordable Care Act] is stubbornly failing to fail,” Cox said. “The market is stabilizing, and insurers are on track to be profitable this year.”

Heather Korbulic, executive director for Nevada’s state-run Obamacare marketplace, said, “We are grateful that [Centene’s] SilverSummit has stepped up to the plate, offering relief to thousands of residents who thought they would e deprived of access to health insurance.”

Cox said there is an incentive for insurers like Centene “to move into counties where they will be a monopoly.” She added, “They wouldn’t be doing this if there wasn’t a profit to be made.”

The Affordable Care Act requires most Americans to have some kind of health coverage or pay a tax penalty. The law authorized the creation of HealthCare.gov and state-run insurance marketplaces to sell private individual health plans to people who did not have coverage from other sources. Centene closed up 1% so far this week at $82.87 on Wednesday (August 16, 2017).

Steve’s Take:

As recently as a few months ago, the Trump Administration was crowing about how Obamacare was failing, just as Mr. Trump had predicted. Dozens of counties across the nation were still without any insurers willing to sell Obamacare insurance in 2018. But in the last few weeks the “bare county” problem, which President Trump had cited as a sure sign the markets were failing, has all but been erased.

On Tuesday (August 15, 2017), Gov. Brian Sandoval of Nevada announced that Centene would offer insurance in 14 rural counties of Nevada that had been bare. That leaves only two counties in the country without insurers saying they will sell coverage; fewer than 400 customers live in those counties.

Economists had argued that the bare county problem didn’t make much sense, at least in theory. It’s typically easy for a company to make money as a monopoly, especially if the government will pay most of the bills. But as some large insurers shifted away from the Obamacare markets, and others worried about policy uncertainty, empty spots started to become increasingly prevalent on the national map.

President Trump has contributed to the uncertainty by not committing to follow through on key parts of Obamacare, for example, subsidizing insurers for providing affordable health insurance to poor people. To the relief of many citizens and their insurers, the federal government will make the crucial Obamacare-related subsidy payments to health insurers in August despite Trump’s threats to end them, a White House spokesman said Wednesday.

The decision to make the August payments came a day after the Congressional Budget Office (pdf) warned that Obamacare premiums would soar an additional 20% above projected price increases if the payments are ended in 2018.

Bottom Line:

How can Centene make Obamacare work whereas its bigger rivals have fled the exchanges en masse?

As I have written previously, Centene is a relative success story in the Obamacare markets, using its slimmed-down Medicaid-like plans to achieve profits in the exchange business. It’s pretty straightforward, according to Centene’s CEO Michael Neidorff the insurer’s Obamacare strategy is a “business-as-usual” approach and he tells investors not get caught up in “unfounded headline volatility.”

Even in the era of the Donald Trump phenomenon, when Tweets become headlines and the White House often talks about an Obamacare implosion or “death spiral,” Neidorff doesn’t quake and tremble. He hits the accelerator instead, charging into the breach.

Now Neidorff is following his own advice in his decision to expand into new states selling individual policies on public exchanges under the Affordable Care Act in 2018.

“Centene  recognizes there is uncertainty of new healthcare legislation, but we are well positioned to continue providing accessible, high quality and culturally-sensitive healthcare services to our members,” Neidorff said in announcing the expansion in June.

Centene placed a big bet on business under the ACA, particularly in states that opted to expand Medicaid coverage for poor Americans. By the end of the first quarter of this year, Centene had 1.2 million “exchange members” compared to 537,200 as of the end of 2016, benefiting in part from exits by other health plans.

Steve's Take: @Centene placed a big bet on #Obamacare exchanges, and it is paying off Click To Tweet

Neidorff has said 90% of business Centene operates on exchanges is eligible for a government subsidy and this year will be managing new membership it has gained from other companies closely. Other insurers left markets after selling health plans on exchange to customers that lost money on those who weren’t subsidy eligible.

Amid Trump’s threats to withhold cost-sharing reductions (CSRs) that millions of Americans need to pay for Obamacare, Neidorff reminded investors this spring that there is still support in Congress for such (CSR) subsidies.

After the announcement Wednesday, Sen. Lamar Alexander (R-TN) said Congress should act soon to guarantee that the CSRs will be paid to insurers through 2018.

Alexander, chairman of the Senate Health Committee, in a statement said, “Congress now should pass balanced, bipartisan, limited legislation in September that will fund cost-sharing payments for 2018 as well as make section 1332 of the Affordable Care Act work better to give states more flexibility in approving insurance policies.”

Of course, Mr. Trump has proven repeatedly that he’s more than willing to forsake his loyal core that squeaked him into the White House against all conceivable odds. I find myself almost willing to wager he’ll do it again, that is, actually not pay the subsidies in September, and blame his predecessor in the Oval Office, or Hilary Clinton, Mitch McConnell, Lamar Alexander, George Washington. Anyone else.

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