- Larry Downing/Reuters
Blue Cross Blue Shield of Kansas City announced Wednesday that it would pull out of the individual exchanges established by the Affordable Care Act in Missouri and Kansas, dealing a huge blow to that market and sending a worrying signal about the future of the healthcare law, better known as Obamacare.
The insurer, also known as Blue KC, cited two reasons for its exit: losses sustained since it entered the exchanges in 2014, and the uncertain future of healthcare policy.
“Like many other health insurers across the country, we have been faced with challenges in this market,” Danette Wilson, CEO of Blue KC, said in a statement. “Through 2016, we have lost more than $100 million. This is unsustainable for our company. We have a responsibility to our members and the greater community to remain stable and secure, and the uncertain direction of this market is a barrier to our continued participation.”
Cynthia Cox, an associate director at the Kaiser Family Foundation, a nonpartisan health-policy think tank, said the move could leave many areas of Missouri with no option on the exchanges.
“BCBS of KC is the only exchange insurer in much of western Missouri,” Cox tweeted. “Their exit could leave almost 25 counties without coverage.”
Exchanges that have no insurers have few other options. The state could suspend the penalty for not having insurance and allow people to go uninsured. Another option, used in places like Arizona and Tennessee, is to persuade another insurer to step in and cover the gaps.
In both Arizona and Tennessee, however, a Blue Cross Blue Shield company intervened to bolster the market, which does not appear to be possible in this case. Cox told Business Insider in an interview on Tuesday that the BCBS plans were critical for the survival of the exchanges.
“If the Blue Cross Blue Shield plans or Anthem pull out of the exchanges, then that would be a serious problem for many parts of the country, because that would mean that there would be counties without an insurance company,” Cox said. “Whenever there is one insurance company right now, it almost always is either a Blue Cross Blue Shield or Anthem plan. It goes to show how much the exchanges rely on those plans.”