BlueCross BlueShield of Arizona (BCBSAZ) has a plan to save thousands of residents on the verge of having zero health insurance options through the state’s Obamacare marketplace.
On Thursday, the health insurance company said it would offer Obamacare plans for 2017 to residents living in Pinal County, Ariz. This is the 13th county where BCBSAZ will be the sole insurance provider next year.
“We are committed to serving these areas in 2017,” said Rich Boals, president and CEO of BCBSAZ, in a statement.
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But Boals also warned that the nature of some Obamacare insurance exchanges isn’t sustainable, including in Arizona. A string of major insurers, including UnitedHealth Group (UNH), Aetna (AET), and Humana (HUM), recently pulled out of Obamacare’s marketplaces in the wake of mounting losses in their individual insurance franchises.
This decision left consumers in numerous counties with a single Obamacare plan provider and soaring premiums in 2017. Thanks to Aetna’s unexpected exit from most regions, which the firm announced in August, Pinal County was poised to become the first without any providers at all. But then BCBSAZ stepped in.
“Regulators and policy makers must find a way to stabilize the market and put long-term fixes in place,” said Boals. “In the meantime, BCBSAZ is trying hard to balance the company’s financial losses from the ACA with the very real concerns of Arizonans.”
Blue Cross’ participation won’t come cheap. The company told the Associated Press that premium rates will increase a whopping 51% in Pinal County next year, although much of that will be counteracted by the federal subsidies that the vast majority of customers earning between 100% and 400% of the Federal Poverty Level (FPL) are eligible for in the marketplaces.
While Americans who have few options in the exchanges can opt to buy individual plans directly from insurers outside the marketplaces, these customers aren’t eligible for subsidies.
Aetna’s abrupt departure from Obamacare, which the firm once considered a ripe business opportunity, has drawn scrutiny for possibly being linked to the Justice Department’s move to block the company’s proposed merger with rival Humana. On Thursday, a group of lawmakers including Sens. Bernie Sanders, Elizabeth Warren, and Sherrod Brown penned a letter to Aetna CEO Mark Bertolini probing that thesis.
“Aetna’s decision regarding its participation in the ACA exchanges appears to be an effort to pressure the Justice Department into approving a merger that the Department has alleged violates antitrust law and has the potential to significantly harm consumers all across the country,” wrote the senators.