Presbyterian Quits Obamacare Market

Insurer Says it Lost Money On Its 10,000 Exchange Members

  BY DENNIS DOMRZALSKI Presbyterian Health Plan said Monday that it is pulling out of the Obamacare marketplace in 2017 because it has lost money on its exchange members. It means that Presbyterian will not sell policies on the national exchange, healthcare.gov., and that the 10,000 people who bought its individual policies for 2016 coverage through the exchange will probably have to find a new insurer. About 80 percent of those 10,000 members received federal subsidies through the healthcare.gov marketplace, a PHP President Brandon Fryar said. If they want to stay with Presbyterian, they would have to buy unsubsidized policies from the company itself. Fryar said the company decided to pull out of the exchange in order to lower the cost for its 16,000 members who bought unsubsidized individual policies off the exchange. The 10,000 exchange members used medical services about 30 percent more than off-exchange members, and Presbyterian lost money on them, Fryar said. As a result, earlier this year, Presbyterian asked the New Mexico Office of the Superintendent of Insurance for an overall rate increase of 35 percent for 2017 for both its exchange and off-exchange members. If a company sells individual policies on the exchange, it has to sell them to off-exchange members for the same prices. By exiting the exchange and shedding those more expensive members, PHP will be able to ask for a 21 percent rate hike for its off-exchange members as opposed to 35 percent, Fryar said. “We made the decision not to offer plans on the exchange because we couldn't offer affordable plans both on and off the exchange, and the majority of our current [individual] customers are off the exchange,” Fryar said. “By virtue of offering only off-exchange plans we could lower our request price increase for those off the exchange.” Exchange members have more chronic illnesses than off-exchange members, and thus are more expensive to insure, Fryer said, adding, “we simply cannot sustain the level of losses that we are experiencing.” Presbyterian's exit means there would tentatively be four companies selling on the exchange next year—New Mexico Health Connections, CHRISTUS Health Plan, Molina Health Care of New Mexico, and Blue Cross and Blue Shield of New Mexico. Blue Cross did not sell policies for 2016, but has asked to get back on the exchange for 2017. Those four companies have until midnight Monday to file their revised rates for the 2017 insurance year on the exchange, Franchini added. Insurance Superintendent John Franchini said that despite Presbyterian's announcement, he is glad there are still four companies that want to sell on the exchange next year. “I always would like to have five carriers in the exchange, that would be really ideal,” Franchini said. “Remember, two years ago there were only two carriers writing individual policies in the state of New Mexico. If we have only four, considering that the marketplace is so volatile, I will accept that.” Nationally, some insurers have suffered big losses on the insurance exchanges. UnitedHealthcare said earlier this year that it would pull out of most of the exchanges it's in because of big losses. And Illinois based Health Care Service Corp., which owns BCBSNM, has also taken big losses on the exchanges.

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