By Caroline Humer
NEW YORK (Reuters) – Anthem Inc. <ANTM.N> and other U.S. health insurers complained to the White House for more than a year that they were losing money on people who waited to sign up for Obamacare coverage until they were sick.
They pleaded with the Obama administration to stem their losses by tightening up on the enrolment rules. When their pleas went unmet, UnitedHealth Group Inc <UNH.N>, Humana Inc <HUM.N>, and Aetna Inc <AET.N> pulled out of most of the government subsidized health insurance market.
But now that the new Trump administration and Republican lawmakers control the future of healthcare, the industry is getting a new hearing. And Anthem – the last national insurer playing big in the Obamacare market – is the loudest industry voice in meetings with policymakers who all have pledged to overthrow former President Barack Obama’s signature law.
President Donald Trump, who has said Obamacare coverage is too costly for customers and taxpayers, is set to meet with insurance industry executives today.
Since the election, lobbyists for Anthem and affiliated Blue Cross insurers have met “24/7’’ with Republicans leading the change effort, including House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell, according to one healthcare industry lobbyist.
They are there “every time Senators and staffers are on the Hill,” the lobbyist said.
Another industry source who attended some of the meetings said lawmakers and aides were keen on hearing what the insurers needed to stay in the market.
That clout may explain Anthem Chief Executive Joseph Swedish’s optimism in comments to investors earlier this month that policymakers would introduce new enrollment rules limiting when people can opt into coverage.
“We do have some positive indicators that stabilization could very likely occur,” Swedish said. “I am again hopeful that our recommendations will be looked at very carefully and adopted.”
A day later, the Trump administration took its first concrete stab at Obama’s Affordable Care Act, proposing regulations that would shorten the enrollment period, establish a new eligibility verification process and force members to pay delinquent premiums if they want to return to the same insurer.
The so-called stabilization proposal addressed many of the industry’s top demands for shoring up the individual market and came after Anthem said it was considering whether it would remain in 2018.
Anthem is the largest insurer among the Blues, a collection of companies that share a governing board, a brand and networks. As a group, they cover the vast majority of people covered by Obamacare.
That means they have the most at stake and a lot of influence in shaping the future of an insurance market that covers more than 10 million people, according to people close to the negotiations.
“Blue Cross Blue Shield does have a larger role in discussing changes,” said an aide to a key Republican Senator.
TRUMP’S 3 ‘R’s: REPEAL, REPLACE, REPAIR
Trump has said he wants to jettison the 2010 law that created Obamacare and replace it with legislation that would change access to individual insurance and the Medicaid program for the poor.
A copy of the administration’s Feb. 10 working draft leaked out Friday. But it was not clear whether there was enough support for all of the measures or how it would evolve. Any major changes aren’t likely to affect consumers before 2019.
In the meantime, Republican lawmakers are hammering out tweaks to Obamacare they view necessary to preventing any more insurers from exiting. They are looking at ways to limit monthly premium increases. For 2017, the average premium went up 25 percent in these Obamacare plans, which incensed many consumers.
Anthem and other Blue Cross plans dominated the individual market before Obamacare coverage took effect in 2014. Obamacare remade that market and sought to stimulate competition by financing the start up of about two dozen smaller insurance co-ops. The Obama administration also courted big players, such as Aetna and UnitedHealth, by forecasting rapid enrolment growth to more than 20 million people, which failed to materialize.
Anthem operates the BCBS license in 14 states and insures more than 800,000 people in the Obamacare exchanges – the single biggest portion. It said it was making a slight profit on that business. Its rivals exited after losing hundreds of millions of dollars last year.
Wall Street analysts said Anthem was better at pricing and benefited from a well-known brand. Its huge pool of members also helps Anthem drive good deals with doctors and hospitals. Still, Anthem’s business is mostly in the employer-based market; Obamacare customers comprised only about 4 percent of its members at the end of 2016.
Ethan Lovell, co-portfolio manager at the Janus Global Life Sciences fund that owns Anthem shares, said without changes to the exchange rules, the company would likely have to raise the average premium 20 percent in 2018, as it did for this year, to keep from losing money.
In addition to the enrolment rules, Anthem is seeking changes in the way payments for the sickest patients are calculated. It also wants an extension to the planned discontinuation at year’s end of plans that were issued before Obamacare and that don’t meet the law’s coverage requirements.
Ed Haislmaier, senior health policy research fellow at The Heritage Foundation, helped draft the proposed stabilization rule Trump announced Feb. 2. He said he expected the Trump administration to also address Anthem’s older plans.
Swedish also wants the elimination of one of Obamacare’s most controversial revenue sources – an industry-wide premium tax that insurers say has driven up premiums in all private U.S. health insurance and that lawmakers agreed last year to set aside for a year.
On January 4, Representatives Kristi Noem, a Republican from South Dakota, and Kyrsten Sinema, a Democrat from Arizona, introduced the Jobs and Premium Protection Act that would repeal the premium tax; it has 145 co-sponsors.
(Reporting by Caroline Humer in New York and Yasmeen Abutaleb and Susan Cornwell in Washington D.C.; Editing by Michele Gershberg and Lisa Girion)