Affordable Care Act
North Carolinians will know in the next two weeks whether they will have only one company offering insurance through the Affordable Care Act’s online marketplace – or none.
Brad Wilson, CEO of Blue Cross and Blue Shield of North Carolina, said Friday that his company will decide this month whether to continue participating in the marketplace now that its major competitors, UnitedHealthcare and Aetna, have pulled out.
If Blue Cross should drop out too, that would mean 600,000 to 700,000 North Carolinians, who have insurance through the marketplace now, would have almost no options.
“It’s clear something’s wrong. Something’s not working right,” said Wilson, speaking to business leaders at the Hood Hargett Breakfast Club at Carmel Country Club.
The uninsured will “continue to need and to get health care services. (But) nothing is free,” he said. “Uncompensated care is paid for somehow, some way. It will show up in health care premiums ultimately.”
Wilson said Blue Cross is weighing whether it could effectively handle the additional customers that would come from the departure of both UnitedHealthcare and Aetna, which announced its decision about three weeks ago. He said UnitedHealthcare had about 145,000 customers in the state, and Aetna had 200,000.
He said it takes six months to hire and train customer service representatives, and there isn’t enough time to staff up to handle enrollment of so many more people before open enrollment starts Nov. 1. The federal deadline for a decision is Sept. 23.
“We’re working very hard trying to figure out how to make this work,” he said.
Overall, Wilson said the ACA has been good and bad. It’s good because 500,000 to 600,000 more North Carolinians are insured today than before the law was passed. “Think of all the money that brings into the economy, (and) they are getting their (health care) needs attended to,” he said.
But despite the federal requirement to have insurance, too few young, healthy people are buying policies, and that means their premiums are not balancing out the high cost of caring for sicker, older people. “Costs are much higher, and quite frankly there is no end in sight,” Wilson said.
In the past two years, Wilson said Blue Cross lost $405 million on its 450,000 customers who bought insurance through the online marketplace. That’s a fraction of the company’s total 3.9 million customers statewide.
Both UnitedHealthcare and Aetna, which are much larger, for-profit, national companies, also reported losses on marketplace business and announced they won’t participate in multiple states next year. That leaves Blue Cross as virtually the only marketplace option in six states, including North Carolina. Cigna has said it intends to offer marketplace plans in five counties in the Raleigh area.
Blue Cross, the state’s largest insurer, is seeking an 18.8 percent rate increase on average for 2017, and says it under-priced its ACA products in North Carolina because it underestimated the volumes of sick people who would enroll. The state insurance department won’t announce the approved rates until Oct. 28. For 2016, Blue Cross was approved an average 32.5 percent rate increase.
Instead of calling for repeal of the ACA, as Republicans in Congress have done many times, Wilson said the health reform law should continue, with changes to make it work better.
He outlined several suggestions, including a reduction the number of special enrollment periods. As it is, he said, people can “jump in and jump out” at too many times, allowing them to get insurance when they need it and drop it when they don’t.
Although many of the changes he suggested would take action by Congress, which has not shown a willingness to compromise, Wilson said he is hopeful. He encouraged business leaders to “educate yourself” and “raise your voice” to encourage lawmakers to come together to solve a common problem.
During a question and answer period, Wilson also said:
▪ He supports expansion of Medicaid to cover more than 500,000 low-income residents who don’t qualify for subsidies that would make insurance affordable on the ACA marketplace. North Carolina is one of 19 states that have declined to accept federal money to expand Medicaid as part of the ACA.
“The fact that they are not covered by Medicaid is not a cost-saving mechanism,” Wilson said, noting that they continue to get care, often after problems have become worse and more costly to treat.
▪ Because of skyrocketing drug prices, he supports a ban on pharmaceutical advertising. He also said the federal government should be authorized to negotiate drug prices under the Medicare Part D program. He referred to the recent controversy over major price hikes for drugs, such as the Epi-Pen to treat anaphylactic shock.
Specialty drugs – those used to treat complex conditions or reach a limited number of patients – make up just 1.8 percent of all U.S. prescriptions. Yet they account for 43.2 percent of drug spending, according to a study released early this month by researchers at UNC Chapel Hill.
Last year, Wilson said Blue Cross’ spending for specialty drugs jumped 34 percent. “Pharmaceutical cost is more than any other single category of spending in our company.”