At some point this year, 80 counties across the country were in danger of not complying with the ACA, or Obamacare, in 2018. Today, it was announced that the final county without an insurer in the U.S. — Paulding in Ohio — will have a plan for its 334 residents in 2018. Nonprofit managed care company CareSource will sell the health plans.
“This is showing that the ACA is stubbornly failing to fail,” the Kaiser Family Foundation’s Cynthia Cox told Yahoo Finance. Cox said that insurers have struggled in the past to make money, but analysis from Kaiser and many others has found that insurers are on a profitable path this year. “Despite the political uncertainty, insurers seem to be interested in participating in this market,” she said.
Last week, Centene (CNC) filled the gap left after Anthem (ANTM) and other major insurers withdrew from some Nevada counties. Wisconsin’s sole uninsured county, also left bare after an Anthem departure, found coverage, though the insurer is not currently known. This follows previously uninsured counties in Missouri, Tennessee and Indiana finding solutions for 2018.
All of this contradicts President Donald Trump’s repeated assertion that the Affordable Care Act is failing. “Obamacare isn’t failing. It’s failed. Done,” Trump said in July. “We’ll let Obamacare fail.”
How and why the void got filled
In some instances, a single insurer like Centene has come to fill the void left by insurance companies. But often times, said Cox, the process is complex and involves piecing together a solution. This is what happened in Ohio.
Following Anthem’s exit, the state stitched together a patchwork of multiple insurers to cover 20 counties. “The state has been working hard to get insurers to cover all these areas,” said Cox.
These solutions aren’t seamless, but Cox said there are incentives for companies to swoop into uninsured markets. Many insurers have provider networks in various counties, making it logistically easy to set up shop, and being the only network is tantamount to a monopoly. “[These insurers] can charge higher premiums without competitors,” said Cox.
There are other reasons why Centene may be able to deal with areas Anthem is unwilling to handle. Centene has been a Medicaid Managed Plan provider that’s been successful on exchange markets, said Cox. This may enable it to leverage those provider networks, which may be narrower and cheaper with lower reimbursement rates — something that would translate to lower premiums and more competitiveness. “It’s a business decision for all these companies at the end of the day,” said Cox.
On top of that, coming in as the only insurer in town can earn goodwill from the public and from local governments. “State insurance departments are under pressure to get [counties] covered,” said Cox. “They also grant Medicaid Managed Care contracts, so there may be some incentive for these companies.”
This means that Medicaid might be partly to thank for the ACA’s success in these counties, though it’s impossible to know. “Negotiations are between state and insurer,” said Cox. “But that may be part of what’s going on here.”
Trump administration’s insurance subsidies haven’t helped
Much of the Obamacare void in counties was because of Anthem’s departure. In many counties, the insurer was the sole shingle hanging on the exchanges. But instead of citing losses, Anthem instead pointed to the uncertainty of a shrinking market and the cost sharing reduction payments (CSR) being paid by the Trump administration that helps subsidize insurance for low-income individuals.
“This problem has come up at least in part because of the cost sharing subsidy payments,” said Cox. “It’s hard to say how much of it might have happened without [the uncertainty].”
The decision to continue to keep making these CSR payments is up to Trump, giving him massive control over the future state of the ACA, which he continues to contend it is failing. Even though it’s unknown whether CSR payments will continue, the individual insurance market has still managed to cover all but one county, disproving his assertion and highlighting that Trump cannot simply “let it fail.”
Update 8/24: This post was updated to reflect the last U.S. county not covered under Obamacare, Paulding, Ohio, will have health plans in 2018.