WINCHESTER — Optima Health has announced it will leave Virginia’s Affordable Care Act health insurance marketplace in 2018, leaving Winchester and Frederick and Clarke counties with no insurers slated to participate in the program.
Late Wednesday, Optima put out a news release stating it would only continue coverage in areas of the state with Sentara Healthcare hospitals. Optima, a Hampton Roads-based insurer, is a subsidiary of Sentara and was expected to be the sole insurance provider present in the market in 2018.
“The exiting of [other] carriers along with the uncertainty in Washington, presented unprecedented circumstances,” stated a Wednesday news release from Optima.
With the decision to pull out, Winchester is one of 14 cities with no insurer left and the second largest, next to Roanoke. Frederick and Clarke are two of 48 counties with no insurer; Frederick is the third largest on that list next to Roanoke and Montgomery counties.
“You don’t have any [options],” said Doug Gray, executive director of the Richmond-based business group Virginia Association of Health Plans. Medicare enrollees and employer-provided insurance plans won’t be affected, but as of Thursday, people who have individual insurance in this area under former President Barack Obama’s health care law — also known as the Affordable Care Act, or “Obamacare” — are slated to lose coverage with few, if any, options to get it back. “It is what it is.”
What “it is” is a response to “uncertainties in the market,” Gray said, and he doesn’t mince words when it comes to assigning blame for those uncertainties — placing it squarely on the shoulders of Congress and President Donald Trump.
“It’s directly a result of their actions,” Gray said. “Six months ago we had lots of companies participating and no bare counties. What’s happened in the last six months?”
What’s happened, Gray said, is the president has threatened to sabotage the health care law by stopping monthly payments of cost-sharing reduction subsidies to insurance providers. The subsidies help reduce copayments and deductibles for low-income enrollees.
Despite Trump’s threats, the federal government has continued paying the subsidies month-to-month, which was started by Obama when Congress refused to allocate money to make the payments. Republican House leadership later sued the administration, arguing the payments are an overreach of executive authority; the case is pending in a federal court.
The uncertainty over whether cost-sharing reduction payments — which are required under the health law — will continue is the “chief” reason insurers are pulling out of rural areas where the cost to provide care is greater than in denser urban areas, causing the market to destabilize, Gray said.
It’s a problem the federal government has the power to fix by rededicating itself to making the cost-sharing reduction payments, at least until such time as an overhaul — commonly referred to as “repeal and replace” — goes through.
“It’s their job to fix this,” Gray said of Congress and the president. “The decision they made was to create this uncertainty. I’m sure some people in your area voted for these people.”
He said the idea of reforming the health care law is fine, but stabilization has to come first.
Whether or not Congress, as it convenes for its fall session, will pass a stabilization bill remains to be seen. Senate hearings Wednesday showed promise for bipartisan cooperation, but it’s not clear if a Senate bill would also pass the House or be signed by the president.
The office of Rep. Barbara Comstock, R-10th, did not respond to requests for comment on this article.
A bill would need to pass this month to have any effect, said Kelsea Smith, customer development consultant for Sentara.
“We’re kind of in a time crunch,” she said.
Sept. 27 is the final deadline for companies to submit plans for 2018. Until that deadline passes, “it’s not a done deal” that Optima will move forward with its plans to pull out of many counties in Virginia.
“We are still working with the commonwealth to come up with creative solutions,” Smith said.
Anthem Blue Cross Blue Shield, which has been the largest insurer in the state, said last month it would pull out in 2018. In May, Aetna became the first insurance provider to announce it would leave Virginia’s individual marketplace in 2018. Those two, along with Optima, were the only three companies offering plans in this area.
“With three national insurers — Anthem, Aetna and UnitedHealthcare — leaving the market [in Virginia], over 350,000 Virginians will be losing their healthcare coverage on January 1,” the Optima news release states.
In Frederick County, there were 3,673 Affordable Care Act enrollments in 2016, according to the federal Centers for Medicare & Medicaid Services. In Winchester, there were 1,216. In Virginia’s 10th Congressional District, which stretches from Northern Virginia to the West Virginia border and includes Winchester and Frederick and Clarke counties, there were 39,800 Affordable Care Act enrollments in 2016, according to the Kaiser Family Foundation.
Of the nearly 9,400 insurance plans administered through the Creekside Insurance office in Frederick County, Chief Operating Officer and Co-founder Jim DuBrueler previously said 1,769 are Affordable Care Act policies. Aetna accounts for 609 plans, Anthem 563 and Optima 321. The rest are insured by other providers in other parts of the state and West Virginia.
DuBrueler said he feels his office’s figures are proportional to state statistics.
“Approximately 1,300” folks who use Creekside’s service are going to lose their health insurance, DuBrueler said. Regionally, he anticipates about “eight times that” number will lose out.
Affordable Care Act subsidies are only available for households within 100 percent and 400 percent of federal poverty level guidelines. Below 100 percent, applicants may qualify for Medicaid; above 400 percent, people pay full price.
With all three of the area’s insurers pulling out of the marketplace, there will be no availability for local subsidies. Frederick and Clarke are set to become “bare counties,” a term used in reference to a place where Affordable Care Act qualifiers have no options for coverage.
That means anyone who has individual health insurance, subsidized or not, is going to lose coverage.
“My husband is self-employed and individual policies are our only option,” said Scarlet Costello, a Frederick County resident, via email Thursday. “We pay $1,422.08 a month ($17,064.96 annually) for [two] adults with a $12,000 a year deductible. That in itself is a crime. My husband and I are in our early 60s and this is an age when we most need insurance. The news today is devastating.”
The country has not had any bare counties since 2014, when Obama secured a single insurer for one county in Ohio.
“Members will be notified of their changes in October,” the release states. “In the meantime, they may contact their broker or an Optima Health personal plan adviser to learn more and talk about their options.”
Mark Merrill, CEO of Valley Health, said people may be able to buy insurance outside the marketplace, through a broker or by working directly with a provider.
“We’re still in conversation with Optima,” Merrill said. “It’s not totally closed yet.”
From the standpoint of the hospital system, people losing coverage opens the possibility of more charity care and bad debt, Merrill said, but he’s optimistic there can be a bipartisan fix that doesn’t include “letting the whole system crater,” especially “since ‘repeal and replace’ seems to have died for the moment.”
Smith said talks with the state include the other insurers who have said they will pull out of the marketplace, “not just Optima.”
Gray said Optima’s decision to leave follows Anthem’s decision; when one insurer leaves, it encourages others to do the same because the pool becomes larger and includes more sick people. Ultimately, Gray said, there are too many sick people and not enough healthy people participating.
“That’s all there is to it.”