An insurer’s Obamacare grade: passing, but barely

The Observer editorial board

BCBS CEO Brad Wilson gives the ACA a C-minus or D-plus.
BCBS CEO Brad Wilson gives the ACA a C-minus or D-plus. JOHN ROTTET - jrottet@newsobserver.com

Last month in this space, we suggested that Obamacare is working, at least with regards to its goals of slowing health care costs and bringing insurance coverage to millions more Americans.

Our readers, however, were quick to point out that insurance providers are not nearly as enthusiastic. That’s true. One of the nation’s larger insurers, UnitedHealth, announced last month that it would pull out of several Obamacare markets, including North Carolina. Another N.C. provider, Blue Cross Blue Shield, might stop selling ACA policies in 2017, CEO Brad Wilson said in February.

Wilson stopped by Friday for a meeting with the Observer’s editorial board. We asked if Obamacare was a success or failure. He offered a grade instead: C-minus or D-plus.

Obamacare isn’t a failure, he told us, but it’s also not working for his company. Blue Cross has lost more than $400 million in the last two years on the Affordable Care Act. The company is doing fine overall, he said, but the ACA losses do not make for a sustainable path.

Still, it’s a path Wilson believes can change. Instead of calling for Obamacare’s repeal, he offered reforms Blue Cross would like to see:

▪ Strengthen sign-up mandates: Insurers need to cover healthy (and inexpensive) young people to help pay for those who need more medical care. While Obamacare requires most people to either get insurance or pay a penalty, that mandate isn’t being enforced enough, Wilson says. The penalty also could be steeper.

▪ Tighten special enrollment periods: Obamacare enrollees are allowed to jump in and out of coverage too easily, Wilson said. That means people can sign up just before a planned medical procedure, then drop out soon after. That’s good for the patient’s wallet, but not for the insurer’s bottom line.

▪ Fulfill promises to cover insurers’ losses: Obamacare promised a form of insurance for insurance companies who participated in the ACA exchanges. These were called “risk corridors,” and they involved compensating insurers who are losing money because they have too many sick people on their rolls.

That money has not come as promised, Wilson said. In 2014, Blue Cross only received 12.6 percent – or $20 million – of the risk corridor money it was owed. If it had received the full $190 million or so it was owed, the company would have come close to breaking even on Obamacare business.

The bottom-line pain was offset at least some when Congress voted for a one-year suspension of the Health Insurance Tax, but Blue Cross and other major insurers say that’s not nearly enough.

Wilson also said Friday that he wouldn’t mind if North Carolina lawmakers changed their mind and accepted the federal government’s offer to expand Medicaid coverage in the state. Uninsured patients are costly to providers, he said, and those providers inevitably try to pass on some of the expense to insurers.

Wilson, along with other insurance CEOs, has passed along his concerns and recommendations to U.S. Health and Human Services Secretary Sylvia Burwell. He said his hope is that like other significant pieces of legislation, the ACA’s flaws can be patched and repaired.

“For all my friends who say it’s not working at all and needs to be repealed, I disagree with them,” he said.

We agree. Obamacare is working. Not perfectly, and not well at all for some. But it can and should be fixed.