Partial Anthem Pullout Leaves Consumers With Few Options

For about 60,000 Covered California customers, choosing a health plan next year will be easier, and possibly more painful, than ever: There will be only one insurer left in their communities after Anthem Blue Cross of California pulls out of much of the state’s individual market.

That means they could lose doctors they trust, or pay higher premiums.

Anthem’s departure is also a blow for the Covered California exchange, which has often boasted that healthy competition among its plans helped lower costs and improve its members’ access to care.

Competition won’t be so healthy next year for Covered California enrollees in six counties: Monterey, San Benito, San Luis Obispo, Santa Barbara, Inyo and Mono. For them, it will be Blue Shield of California — or bust.

Portions of seven other counties will also be served only by Blue Shield.

Californians in those areas who buy their plans outside the Covered California exchange may also be limited to one insurer. It’s not clear how many people that includes.

“If one of (Covered California’s) goals … was to provide a competitive marketplace where people will have options and real choices, then there is a failure to meet that goal” in those areas, said Kevin Knauss, an insurance agent based in Granite Bay, outside Sacramento.

The lack of competition means “there are definitely going to be people who will have to pay more for their health insurance,” Knauss said.

Consumers who live in the one-plan areas and don’t receive federal tax credits to lower the cost of their premiums will be the most affected, he added. They will have to shoulder the full amount of the increase if the Blue Shield premiums are higher than what they are paying now.

Covered California enrollees whose incomes qualify them for the tax credits won’t bear the entire rate increases because as premiums rise, so do the credits. The increase in premium assistance would absorb a significant portion of the rate hikes.

Anthem cited uncertainty at the federal level and an unstable marketplace in its decision to withdraw from 16 of 19 pricing regions in the individual market. The 28 counties where it will continue to offer plans are mostly in the rural parts of Northern and central California.

Blue Shield is the only insurer that will offer plans statewide on the exchange in 2018.

Nationally, nearly a quarter of Obamacare exchange enrollees will have just one insurer in their areas next year, and another quarter will have two carriers to choose from, according to a Bloomberg News analysis.

About 381 people in two counties — Paulding, Ohio, and Menominee, Wis. — could have no exchange-based insurance options at all, according to the Kaiser Family Foundation. But that may change before insurers sign contracts in the fall.

Overall, 153,000 Anthem policyholders in Covered California will have to find new plans. About 144,000 people who purchase their policies outside the exchange will also be forced to switch insurers, Anthem reported.

But the state insurance market remains broadly competitive despite Anthem’s impending departure, and most people will have choices, said Tam Ma, a legal and policy director for Health Access California.

According to Covered California, 96% of its enrollees will have at least two plans to choose from next year, and 82% will have three or more. Still, choice will be more restricted than this year, when all enrollees had at least two carriers to choose from and 93% could pick from three or more.

For the 4% who won’t have a choice in 2018, “it is a huge inconvenience for them to have to sign up for another plan … particularly people who are in the middle of treatment or have ongoing health care needs,” Ma said.

Covered California said in an email that it will strive to bring choice and competition to those people in the coming years. It also said a new provider directory will help enrollees search for doctors by plan. The directory is expected to be available on the agency’s website before consumers start renewing their plans in October, said Covered California spokesperson Lizelda Lopez.

About 80% of doctors on Anthem’s network are also on Blue Shield’s network, said Covered California spokesman James Scullary, who added that Blue Shield has a larger list of providers. For every doctor on Anthem’s network, there are about 3.5 doctors on Blue Shield’s, he said.

Sandy Halverson of Goleta is among that 4% who won’t have any choice, because she lives in Santa Barbara County, where Blue Shield will be the only insurer next year.

In Santa Barbara, as in most places where it is the only carrier, Blue Shield will offer only a Preferred Provider Organization (PPO). But it will offer a Health Maintenance Organization (HMO) option in some locations, including San Luis Obispo County.

Halverson, who works at a car dealership, currently has an Anthem plan through the exchange. She likes the fact that her primary care doctor of 15 years is familiar with her medical history.

She gets her care from Sansum Clinic, a large nonprofit group with 22 locations, serving about 130,000 patients on the state’s Central Coast. Sansum does not contract with Blue Shield, which means that next year Halverson and about 7,000 other patients now covered by Anthem in the individual market will have to find new doctors or pay out-of-network costs if they want to keep their current ones.

Halverson does not relish having to choose a new doctor. She imagines she’ll just pick one randomly from a list — and then hope it’s a good match, she said.

Kelley Lovejoy, an insurance agent in Santa Barbara, said many of her clients chose Anthem because of its relationship with Sansum, and they have been confused and frustrated since learning their insurer is pulling out.

“That is my primary concern, my clients not being able to see the physicians and specialists that are important to them,” Lovejoy said.

There might be hope, however. Sansum wants to establish a relationship with Blue Shield, said the group’s spokesperson, Jill Fonte.

Blue Shield already has a network of providers in Santa Barbara, but it is open to discussions with Sansum and other health care providers throughout the state, said Lauren Bartlett, a spokesperson for the insurer.