There’s an awful lot of talk about Obamacare these days, especially with the recent news that premiums for Affordable Care Act (ACA) plans in the federal marketplace are set to rise by an average of 25% for the 2017 plan year. While that statistic may lead people to believe that plans in the ACA marketplace have been wholly unsuccessful, that’s not true across the board. A Modern Healthcare analysis of Blue Cross and Blue Shield plans in 34 states on the federal exchange showed little consistency from one state to another, with plans in some states posting significant profits and others posting substantial losses. In fact, 17 of those 34 plans posted underwriting gains in 2015 while 16 posted losses. Blue Cross and Blue Shield of North Carolina was firmly in the latter category, posting $67.6 million in losses on their ACA plan offerings in 2015.
Of the states covered by Blue Cross Blue Shield (BCBS) plans that posted gains in 2015, 11 had expanded Medicaid while just three – Florida, Wyoming, and South Carolina – had not undertaken the federal Medicaid expansion. The 16 BCBS plans that posted in losses in 2016 covered eight states that had not expanded Medicaid along with 12 states that had undertaken expansion. While it’s unclear if correlation implies causation in this case, what we see from that the data is that plans were more likely to post gains when they were covering populations in states that had expanded Medicaid. According to the Kaiser Family Foundation, 32 states and DC have done so, while 19 have not adopted the expansion.
Medicaid expansion has become a hot button issue this fall in the North Carolina governor’s race. While incumbent Republican Governor Pat McCrory has not agreed to undertake Medicaid expansion, Democratic challenger Attorney General Roy Cooper has argued that going through with the expansion would provide a shot in the arm to the state’s economy, and help employers keep their healthcare premiums lower.
Should Cooper be elected governor on November 8th, North Carolina may well become a case study for whether or not Medicaid expansion actually does help improve financial outcomes for plans operating on the federal healthcare exchange – and ultimately whether that has any impact on costs for employers who are sponsoring group health plans. One way or another, we’ll all be able to take a deep breath on November 9th.