Wellmark Blue Cross and Blue Shield will start selling health plans on Iowa's exchange during the 2016 open-enrollment period after sitting out the first two years.
Wellmark, Iowa's largest insurer, will add a popular brand to the marketplace for 2017 coverage. Problems have surfaced in Iowa this year. The state's not-for-profit plan created by the Affordable Care Act folded, and overall enrollment remains lackluster.
About 225,000 Iowans are eligible for exchange plans, but only 39,000 people, or 18% of that population, have enrolled, according to the CMS and Kaiser Family Foundation. The low enrollment was due in large part to Wellmark not participating.
Many of Wellmark's members have taken advantage of keeping non-grandfathered health plans until 2016, a move President Barack Obama made in 2013 to avoid backlash from consumers who had their previous policies canceled. Insurers operating in the exchange therefore had to compete with a popular Blues brand that was retaining healthy members.
“Insurers have put a lot of marketing muscle behind the marketplaces, and that's been lacking in Iowa,” said Larry Levitt, a senior vice president at the Kaiser Family Foundation who studies health insurance.
“Wellmark is such a huge player there,” he added. “It's only the lowest-income and sickest enrollees who were attracted to the marketplace who were willing to leave the Wellmark brand behind.”
Wellmark still sells off-exchange plans that are ACA-compliant. But the insurer was wary of the technological issues and “customer experience” associated with the federal exchange. The Blues plan was also waiting for the U.S. Supreme Court to rule on King v. Burwell to see if premium subsidies would still be allowed. The justices upheld the subsidies this summer. People who earn up to 400% of the federal poverty level—$47,080 for a single person and $97,000 for a household of four—are eligible for subsidies to pay down their monthly costs, and about 86% of Iowa exchange members received those subsidies this year.
“We have said consistently that it was not a matter of 'if' but 'when' we would join the public exchange,” Wellmark CEO John Forsyth said in a news release.
Five insurers—Aetna's Coventry subsidiary, Avera Health Plans, Gunderson Health Plan, Medica and UnitedHealthcare—are offering individual plans on Iowa's exchange for this upcoming open-enrollment period, which starts Nov. 1.
Iowa's exchange has been in disarray since CoOportunity Health, the state's co-op, went bankrupt and was liquidated this year. CoOportunity was one of the fastest-growing co-ops in the country, enrolling 100,000 members in individual and small-group policies throughout Iowa and Nebraska. But medical claims were exceeding premium revenue, as the insurer covered many sicker-than-average people.
Wellmark also is the Blue Cross and Blue Shield insurer in South Dakota. It will not sell plans there in 2017 and “will continue to evaluate the market in South Dakota for potential exchange participation in 2018,” a spokeswoman said.