Around 80% of North Carolinians who do not have job based health insurance have just one carrier option in 2017—Blue Cross Blue Shield—putting the Affordable Care Act exchange in crisis.
The company has decided to continue selling non-group insurance in all of the state’s 100 counties.
Blue Cross Blue Shield North Carolina chief executive Brad Wilson said this may mean that the company will serve an additional 200,000 clients in the state. However, industry observers doubt that the additional clients will be beneficial to the company, as they constitute a medically high risk pool, which caused UnitedHealth and Aetna to exit the exchange in the first place.
However, analysts note that these high risk enrollees are not to be solely blamed for the exchange crisis in the state. Rather, they point out that the way these exchanges are structured makes them non-viable for players.
Among others, it was noted that insurance regulations like community rating and weak individual mandate that makes sick people flock to the exchanges and healthy participants opt out of insurance.
For instance, the exchanges mandate that the community rating ratios are rigid at 3:1. This means that insurers cannot charge premiums for older people by more than 3 times than that of younger participants’. This means that younger participants are subsidizing the cost of insurance for the elderly. Ideally, analysts say, ratios should be pegged at 5:1 or 6:1 for the exchanges to be sustainable.
Still, industry observers say that Obamacare has a silver lining, which are the health savings accounts (HSAs). If expanded, HSAs could be a key to empowering consumer driven healthcare. Consumers are in charge of their HSA contributions and out of pocket medical expenses, thus giving insurers incentive to be more transparent in their pricing.