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US President Barack Obama pauses while talking to employees after touring the Amazon Fulfillment Center in Chattanooga, Tennessee, July 30, 2013.
Blue Cross Blue Shield of Kansas City announced Wednesday that the company is pulling out of the Affordable Care Act's exchanges in the states of Missouri and Kansas, dealing a huge blow to that market and sending a worrying signal about the future of the law.The insurer, also known as Blue KC, cited two reasons for its exit: losses sustained since they entered the ACA markets in 2014 and the uncertain future of healthcare policy.
"Like many other health insurers across the country, we have been faced with challenges in this market,"Danette Wilson, CEO of Blue KC, said in a statement. "Through 2016, we have lost more than $100 million. 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."
Cynthia Cox, associate director at the Kaiser Family Foundation, a nonpartisan health policy think tank, the move could leave many areas of the state with no option on the Obamacare exchanges.
"BCBS of KC is the only exchange insurer in much of western Missouri," Cox tweeted. "Their exit could leave almost 25 counties without coverage."
Exchanges that have no insurers have little other options. The state could suspend the penalty for not having insurance and allow people to go uninsured. Another option, which has been used in places like Arizona and Tennessee, is to convince another insurer to step in and cover the gaps.
In both Arizona and Tennessee, however, a Blue Cross Blue Shield plan intervened to bolster the market, which does not appear to be possible in the Missouri case. Cox told Business Insider in an interview on Tuesday that the BCBS plans are critical for the survival of the exchanges.
"If the Blue Cross Blue Shield plans or Anthem pull out of the exchanges then that would be a serious problem for many parts of the country because that would mean that there would be counties without an insurance company," Cox said. "Whenever there is one insurance company right now, it almost always is either a Blue Cross Blue Shield or Anthem plan. It goes to show how much the exchanges rely on those plans."