Georgia Chapter, American Academy of Pediatrics: 2017

Centene Corp. is stepping in to sell health exchange plans in the 14 Nevada counties previously at risk of having no insurer for their exchange plans next year, the state's governor announced Tuesday. The insurer had previously announced it was expanding into the state, but did not specify which counties it was entering.

The Nevada news follows the announcement that Centene is also stepping into the last remaining so-called “bare county” in Indiana, potentially leaving just two Midwestern counties — Paulding County, Ohio, and Menominee County, Wisconsin — without an exchange plan for consumers next year.

Nevada Gov. Brian Sandoval, a Republican, delivered the news in Silver Springs, a sparsely populated part of the state, to underscore the importance of access to health care in rural areas. Nevada’s 14 bare counties only contain 8,000 customers of the exchanges created by the 2010 health law (PL 111-148, PL 111-152). Only 381 exchange customers live in the bare counties in Ohio and Wisconsin.

“I know there is more work to do,” said Sandoval, whose term ends after next year. “There is no doubt about that. We’re going to be talking about pricing and things as we move forward.”

Sandoval personally reached out to Centene to help cover the stranded counties, but the looming filing deadline meant the insurer had to build a network of doctors and health care professionals quickly. Centene’s Nevada subsidiary, SilverSummit Healthplan, consequently decided to lease the network of Reno-based Hometown Health, the insurance arm of health system Renown Health.

Heather Korbulic, executive director of the state exchange, Nevada Health Link, said the team was “grateful and enthusiastic,” to SilverSummit and Renown, noting that the last few months had been “tumultuous.”

Korbulic had been exploring a number of alternative options for consumers in the stranded counties, including letting those residents enroll in plans offered in other parts of the state or finding ways to absorb them through government-run health programs. She said she’s already reaching out to health plans about what she can do to create stability and competition in 2019.

More than 60 counties nationwide have at one point been at risk of having no exchange options, according to Kaiser Family Foundation health insurance expert Cynthia Cox. Centene, which also has a large operation running Medicaid plans, has now covered more than half of those counties, according to Cox. That makes Centene the only major insurance company to expand in an exchange market that has cost others hundreds of millions of dollars.

Centene Chief Executive Officer Michael Neidorff has repeatedly said that the exchanges are “business as usual,” in stark contrast to other insurance CEOs like Aetna’s Mark Bertolini, who publicly said the exchanges are in a “death spiral.”

Other local plans have helped to fill the gaps as well. CareSource, a nonprofit insurer, stepped in to cover three of Indiana’s bare counties, and joined four others in covering bare counties in Ohio. In Virginia, Optima Health expanded to cover 50 counties that would have been left bare when Aetna, Anthem Inc. and UnitedHealth Group announced their withdrawal from the state, according to Cox.

Centene’s experience in Medicaid, where consumers often have low incomes with complex health problems and fluctuating home and work situations, makes the company better suited for the individual market, where many consumers’ situations are similar. Neidorff also attributes the company’s success to its small-scale, locally adaptable business model.

Republicans are still working on a way to repeal and replace former President Barack Obama’s legacy health law, while simultaneously starting work on a bill that would stabilize the insurance marketplaces. A Senate bill to repeal parts of the law fell short of passage by one vote last month, but Sens. Lindsey Graham, R-S.C., and Bill Cassidy, R-La., are working with governors on a plan that would extend federal block grants to states.

Rising premiums and insurer exits have dogged the exchanges every year, but the uncertainty over Republicans’ bid to repeal the law has exacerbated the problem. President Donald Trump has also repeatedly threatened to end critical subsidies for the out-of-pocket costs of low-income consumers on the exchanges. As a result, the Centers for Medicare and Medicaid Services recently extended the rate filing deadline by three weeks to Sept. 5.

Some state officials have had to get creative to keep insurance companies at the negotiating table. In California, exchange director Peter V. Lee would let insurers increase prices for silver plans an additional 12.4 percent if the subsidies are canceled, in addition to the 12.5 percent average increase granted for all plans on the state exchange. Lee is also presenting a plan that would let insurers recoup losses from the uncertainty about White House and congressional actions through rate hikes in future years.

While the number of bare counties has shrunk considerably, thousands of counties will only have one exchange option in 2018. And while studies have shown that insurers’ profit margins are improving, consumers still face rising premiums and deductibles they often struggle to afford.