Health insurers and the lobbying groups that represent them blasted a Texas federal judge's decision to strike down the Affordable Care Act as unconstitutional on Friday. They moved quickly to ensure plan members that their insurance coverage and any federal financial help they receive will stay unchanged during the long legal fight sure to ensue.
"While we remain extremely disappointed in this decision, this is going to be a lengthy legal process and while it continues, we are assuring Blue Cross and Blue Shield members that their health coverage and the financial assistance they may be receiving to help them afford it remains in place," said Justine Handelman, senior vice president in the office of policy and representation at the Blue Cross and Blue Shield Association.
The decision came the evening before the ACA open enrollment period for 2019 coverage was set to end. It is unclear if the ruling may have confused American's enough to impact sign-ups, which already trail previous years' enrollment figures.
Ceci Connolly, president and CEO of the Alliance of Community Health Plans, which mostly represents provider-sponsored health plans, said health plans have been dealing with "this ACA roller coaster" for many years and understand that their No. 1 job is simply running their business.
But she warned that the Texas ruling deters health insurers from selling plans on the ACA exchanges, even if they want to after waiting on the sidelines.
"Every time it looks as if that business is starting to stabilize and they prepare to get in, something like this happens and it just reinforces for them why it is such a risky business proposition, because they can't even count on a law that was passed in 2010 remaining on the books," Connolly said.
The exchanges have stabilized somewhat, with average 2019 ACA exchange premiums decreasing 1.5% after years of increases fueled in part by widespread uncertainty among insurers about the future of the ACA and the rules and regulations governing insurance markets. While experts say premiums and plan designs for 2019 are set and will not change, they stressed that insurers will soon be developing rates for 2020 and lingering uncertainty about U.S. District Judge Reed O'Connor's decision could drive premiums higher.
Margaret Murray, CEO of the Association for Community Affiliated Plans, said some of the organization's not-for-profit safety net health plans are already getting calls from health plan members who are concerned about what the Texas ruling means for their coverage. The plans are assuring their members that nothing has changed.
If the decision ultimately stands and the ACA is declared unconstitutional, the law's popular protections for people with pre-existing conditions that apply to those who buy insurance on the individual market as well as those who get it from their employers would be invalidated, legal expert Tim Jost explained in a blog post Monday. So too would the ACA's prohibitions on annual or lifetime limits, required coverage preventive services and limits on cost-sharing.
The decision would jeopardize the Medicaid expansions in the 35 states and D.C. that chose to expand under the ACA, jeopardizing the healthcare of millions of low-income and vulnerable Americans and threatening to saddle hospitals and health systems with debt from uncompensated care. Jost explained the ruling would also impact Medicare by eliminating the program's preventive service requirements and even invalidating taxes that fund Medicare.
If it stands, a health insurance company such as Centene Corp. would be heavily impacted by the decision. Centene is a major insurer in both Medicaid managed care and the ACA exchanges. The St. Louis-based company insured 1.5 million people through the exchanges and 1.2 million through Medicaid expansion as of Sept. 30. That represents about 40% of its total earnings, according to a research note by Leerink Partners analyst Ana Gupte. Centene's net income totaled $828 million in 2017.
Though Centene CEO Michael Neidorff insisted he is "99.999999%" certain the Texas ruling will be overturned, his company still has a contingency in the works to create a product for its current membership that will maintain protections for people with pre-existing conditions.
"We are going to try to file another product only for our current members because I want people that we insure, that trusted us to take care of their healthcare needs, to feel that we're going to do that, and not find themselves on the street one day with no insurance and a pre-existing condition. So I'm doing this just to relax our current members."
Beyond that Centene will operate as usual, he said.
Molina Healthcare, meanwhile, released a statement on Monday saying it is "disappointed" in the ruling, but that "the ACA will remain in effect for 2019, and we are optimistic that it will remain in effect thereafter. We support efforts by Congress and the Administration to stabilize the ACA's programs and ensure continued protection of Americans with pre-existing conditions."
Long Beach, Calif.-based Molina insured 664,000 people through Medicaid expansion and 384,000 through the ACA marketplace as of Sept. 30. That business accounts for about 50% of Molina's earnings, according to Gupte. Molina posted a net loss of $512 million in 2017, but has turned a profit in recent quarters.
Invalidation of the ACA would have less impact on Anthem, Cigna Corp., UnitedHealth Group, and WellCare Health Plans and virtually no impact on Humana or CVS-Aetna's earnings, Gupte wrote.
