Anthem poised for major ACA exchange pullback, analysts say

If Anthem greatly reduces its ACA exchange participation, it will be a major blow to the marketplaces. Image: Matthew Hurst / CC BY-SA 2.0

In a worrying sign for the near-term future of the Affordable Care Act exchanges, a new analyst report said Anthem is likely to majorly reduce its footprint in the individual markets next year.

Based on recent conversations with Anthem executives in Toronto, “we would judge that [Anthem] is leaning toward exiting a high percentage of the 144 rating regions in which it currently participates,” Jefferies analysts David Windley and David Styblo wrote in a research note.

Anthem CEO Joseph Swedish has already hinted at an exchange exit, telling investors on a fourth-quarter earnings call that “if we can’t see stability going into ‘18 with respect to ether pricing, product or overall rules of engagement, we will be making some very conscious decisions with regard to extracting ourselves.”

Anthem and other Blue Cross Blue Shield plans still have a major presence on the exchanges even as other insurers like Aetna, Humana and UnitedHealth have pulled back. Thus, they have been lobbying hard for the policies they’re seeking to improve the individual markets.

To some degree it has paid off, as Swedish has expressed support for actions taken by the Trump administration to stabilize the exchanges, as well as Republicans’ ill-fated attempt to repeal and replace the ACA.

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Yet while improvements such as eligibility verification, more rigid special enrollment period parameters, shortening of premium grace periods are all “steps in the right direction,” the analysts said that according to Anthem management, they are still not enough.

In fact, Anthem’s leaders indicated that regulatory advocacy needs to progress significantly in the next “month or so,” Windley and Styblo wrote, adding that the company expects to have full visibility to its risk pool by the middle of the year.

In a statement emailed to FierceHealthcare, Anthem said simply that it was continuing dialogue with policymakers to emphasize the regulatory and statutory changes needed for a sustainable individual market.

“We continue to actively pursue policy changes that will help with market stabilization and achieve the common goal of making quality healthcare more affordable and accessible for all,” spokeswoman Jill Belcher said.