Obamacare fails to implode as Ohio’s CareSource fills last “bare” US county.

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The News:

Obamacare plans will be sold in every part of the US next year after an insurer agreed to do business in a small Ohio county, overcoming predictions that some Americans wouldn’t have access to coverage under the law in 2018.

Ohio announced Thursday (August 24, 2017) that health insurer CareSource Inc. (Dayton) will offer Affordable Care Act coverage next year in Paulding County, according to Bloomberg. The county, in the northwest corner of the state, had been left without ACA coverage for 2018 after Anthem Inc. said in June it would pull out.

“Our decision to offer coverage in the bare counties speaks to our mission and commitment to the marketplace and serving those who need health care coverage,” said CareSource CEO Pamela Morris, in a statement with the state announcing the expansion.

Ohio’s insurance regulators sought and located insurers to cover about 20 counties that could have been left without Obamacare coverage. Without new plans, about 11,000 people who bought Obamacare coverage in the counties would have been unable to in 2018, according to the state. Regulators in states including Nevada, Indiana and Missouri have also persuaded insurers to enter new counties to ensure counties wouldn’t stand empty.

Even though all US counties are now covered, consumers still face few or no choices in some places because of the pullbacks. About 23% of Obamacare customers, or 2.5 million people, live in counties where only one insurer plans to offer coverage next year, according to data compiled by Bloomberg. Another 26% are in counties with two options.

The Trump administration, which has backed efforts to repeal the Affordable Care Act, had pointed to the potentially bare counties as evidence the law was falling apart.

Matt Lloyd, a spokesman for the Department of Health and Human Services, said the law has still “failed to deliver.” For good measure he added, “On Obamacare’s exchanges premiums continue to surge, insurers continue to abandon wide swaths of the country, and choices continue to vanish.”

Steve’s Take:

Talk about the tables turning on President Trump’s legislative propaganda machine, again.

As recently as a few months ago, the White House was gloating about how Obamacare was failing, just as Mr. Trump had predicted. And so it seemed. 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 been obliterated.

Republicans in Congress were still hell-bent on repealing and replacing it. And the facts supporting the repeal of the Affordable Care Act were compelling: Nearly 50 counties across the US lacked any insurers willing to sell plans on the law’s marketplaces in 2018, leaving almost 40,000 people at risk of having no options for coverage next year.

But that was then. Now, after reports in the past 48 hours that the last two empty counties in Ohio and Wisconsin would be filled, the problem is vanished: No counties currently lack health plans for next year.

The ACA seems to have restored itself, says Vox, or at least staved off catastrophe, even as President Trump has been swearing to just sit back and watch Obamacare implode or nuke it himself by chopping off the cost-sharing reduction (CSR) subsidies to insurers. (What a way to govern, huh?)

What happened? Ask the framers of the ACA that imbued Obamacare with a structure that provides significant federal assistance for many lower-income and middle-class Americans to buy insurance. It is explicitly designed to make coverage reasonably affordable for people, while requiring the government to pick up any excess costs.

That’s a pretty good offer for any business, yes? Just ask Centene Corp. (St. Louis MO).

How has Centene been able to 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.

Vox points out that while Obamacare still has a monopoly problem–there are 1,340 counties, with 2.7 million customers, where only one insurer is available–its market hasn’t imploded. Instead, the design of the law itself seems to have helped bring it back from the edge. State officials also worked at the local level to provide coverage for their constituents.

“It shows how resilient the market is. The open-ended premium subsidies are an enormous carrot for insurers to go into underserved areas, even in the face of significant uncertainty,” Larry Levitt, senior vice president at the Kaiser Family Foundation, said. “It’s not a great outcome to have monopoly insurers, but it’s a whole lot better than having no insurers.”

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.

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 CSRs that millions of Americans need to pay for Obamacare, Neidorff reminded investors this spring that there is still support in Congress for such subsidies.

After the recent announcement that the CSR payments for August would, in fact, be paid, 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.”

Slate points out it is still technically possible that insurers will decide to pull out of some markets before late September, when they must sign contracts with the federal government to offer coverage on the exchanges. Many will almost certainly run for the exits if President Trump follows through on his threat to cut off the CSR payments that month. Moreover, it’s still unclear how sustainable the Obamacare markets are long term in the small, rural counties that have had the most trouble securing insurers.

Steve's Take: Big thank you to @CareSource for ruining #GOP’s claim that #Obamacare is imploding Click To Tweet

For now, Obamacare’s most immediate problem seems to have been solved. It needs some fixes here and there, but everyone, Democrat and Republican, knows that and an increasing number of them welcome that it can be done in the traditional bipartisan fashion.

So, a big thank you to CareSource for ruining the GOP’s claim, at least for now, that Obamacare is imploding. You’re a highly regarded, nonprofit, managed-care company meeting the needs of healthcare consumers for more than 25 years. Good show!

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