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May 25 2017

Obamacare’s Death Spiral Claims Another Healthcare Insurer

by Patrice Lee Onwuka

Blue Cross Blue Shield of Kansas City announced that it is pulling out of the federal health exchanges in Kansas and Missouri for 2018 due to financial losses. Some 67,000 customers in 30 counties in western Missouri plus two counties in Kansas will be impacted. Blue KC is the area’s #1 insurer with more than 1 million customers.

Blue KC’s CEO pointed to losing more than $100 million on the exchanges from 2014 through 2016. CNN Money reports:

"Since 2014, we've expended significant resources to offer individual ACA plans to increase access to quality healthcare coverage for the Kansas City community," Danette Wilson, the insurer's CEO, said in a press release. "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."

Officials knew something was up when they missed the deadline to file rates for 2018. The deputy commissioner of the Kansas Insurance Department, Clark Shultz, noted:

“It’s a surprise,” Shultz said. “It’s like knowing a grandparent is going to die and then when the day actually comes, it’s still shocking.”

However, it’s going to be the customers who face a big wake-up call when open enrollment rolls around later this year.

Missouri’s Democratic Senator Claire McCaskill thinks the solution is to allow customers in counties with no insurer to buy into the DC Health Link plan:

“The challenges in the individual marketplace are exactly why we need options for folks in those counties, to protect Missourians’ access to health insurance,” McCaskill said, “and I think my legislation — letting Missourians who don’t have access to a local insurance provider get the same plans that Congress gets — is the way to do it.”

That’s a nice way of avoiding the issue that Obamacare is failing -- leaving families in the difficult position of trying to find healthcare choices elsewhere.

Blue KC joins a growing list of insurers who have thrown in the towel. Humana and Aetna both said they are pulling out of the remaining markets they are still currently in next year.

Obamacare’s repeal and replacement bill is big news this week, but flying under the radar is more evidence of why the system is falling apart. Unless Congress does something, it will likely collapse entirely. There can be no tinkering around the edges of Obamacare as its supporters suggest. Nor will health insurers sit around waiting for changes while they continue to incur heavy losses.

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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