Four new insurers will enter the Texas market this year to sell Affordable Care Act policies, the most since 2016 and another sign that the often-attacked universal health care law has gained acceptance by both consumers and insurers.
With open enrollment beginning Nov. 1, analysts expect premiums to remain about the same as last year, in part because of increased competition. Fourteen insurers now sell polices through federal ACA exchanges to an estimated 1.4 million Texans.
The four new companies include two, UnitedHealthcare and Aetna, that are re-entering the market after leaving it a several years ago, when the success of the law seemed in doubt and premiums and costs fluctuated significantly. Their return, along with the debuts of Moda Health Plan, an Oregon insurer, and Bright Healthcare, a Minnesota company, illustrate the vitality of the ACA in Texas — despite efforts by the state’s Republican leadership to undermine it, analysts said.
“They see Texas as a potential growth market, which is why we’ll be seeing competition,” said Ken Janda, a former health insurance executive who heads Wild Blue Health Solutions, a consulting firm.
Each year, the federal Health Insurance Marketplace holds an open enrollment period during which Americans, typically those who are not covered by employer plans, can buy or switch health insurance. Many also are eligible for subsidies based on their incomes.
The Affordable Care Act, passed by a Democratic Congress along partisan lines under President Barack Obama, had a rocky start as insurers had difficulty assessing risks and costs of a new pool of customers — many with health problems that insurers might have excluded in the past. Premiums swung up and down. Seven insurers left the Texas exchange at some point after 2014, when the marketplace first opened.
Insurers “hadn’t been in a market before where you couldn’t turn down sick people, so all of their pricing models were off,” said Stacey Pogue, a senior policy analyst at Every Texan, an Austin think tank. “A lot of those earlier guesses were just wrong, and a lot of those big brand names left.”
But as insurers gained experience, premiums stabilized and the market proved it work, the law came under attack from Republicans in Congress and the courts. When Republicans regained control of Congress under President Donald Trump they tried but failed to repeal the law.
Texas Attorney General Ken Paxton sued to overturn the law, but the Supreme Court threw out Paxton’s lawsuit earlier this year. It was the third time the court has upheld the law.
Trump used his executive powers to undermine the law, including cutting back the advertising budget for enrollment, scaling back funding for community groups who help with signups, and cutting the 45-day enrollment period in half.
The Biden administration restored open enrollment to its original length.
Back again
Insurers that leave the ACA market must wait five years before they can return. Aetna, a subsidiary of CVS Health is reentering the Texas market just as the required waiting period has ended. LaMonte Thomas, south central market president for Aetna, said Texas presented an opportunity because the state has the largest uninsured population in the country and the pandemic may be pushing more people to get insurance.
“If you think about especially in Texas, the number of folks that are without access to health care, we thought we had the right value to bring to the marketplace,” Thomas said. “And this is the right time to come back, and provide folks with access to high quality and affordable care.”
UnitedHealthcare did not respond to questions about why they decided to reenter the Texas marketplace.
Shara McClure, senior vice president at Blue Cross Blue Shield, said she anticipates increased competition in the years to come as more insurers enter and gain confidence in the ACA marketplace. In turn, the competition will challenge insurers to offer better plans to win or hold onto customers.
“We need to be cognizant of keeping our premiums competitive or we’re going to see membership losses,” McClure said. “That's part of what's keeping health care affordable, and is challenging companies like Blue Cross Blue Shield to keep offering new plans.”
For instance, Blue Cross Blue Shield introduced a product to the ACA marketplace in 2020 called My Blue Health in Harris and Dallas counties. The plan offers $0 copays at Sanitas Medical Centers, a multinational health care group and partner of Blue Cross Blue Shield. The insurer is expanding that plan into the Austin and San Antonio areas in 2022.
Consumers can expect to see low rates from the new entrants that are trying to grow membership, analysts said. Janda, however, cautioned consumers from buying health insurance based solely on the lowest premiums. The plans might not offer the coverage that people want or need, and, after enticing buyers with low rates one year, may raise them noticeably the next.
“I always warn people, “It's OK to grab this great low rate for one year, but you don't know what's going to happen to that plan next year,’” Janda said. “So, you need to be either prepared to change again next year, or maybe you don’t want to always choose the cheapest rate.”
becca.carballo@chron.com
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