Prices for Obamacare health plans will skyrocket in South Carolina next year, and only one company will sell them, the state Department of Insurance announced Tuesday.
Following the departure of Aetna and United Healthcare, BlueCross BlueShield of South Carolina remains the last option for Affordable Care Act customers in this state.
Even BlueChoice, a popular subsidiary of BlueCross BlueShield of South Carolina, will be eliminated in 2017 as the insurer attempts to save money by pursuing a “one-company approach.” At least four other states will be left with just one Obamacare insurer next year.
“I think consumers, from a national perspective, need to be alert that the overall architecture of this market is spiraling in the wrong direction,” said Jim Ritchie, executive director of the S.C. Alliance of Health Plans and a former Republican state lawmaker.
More than 200,000 Obamacare shoppers in South Carolina face fewer choices for coverage next year. They should also expect sticker prices for their premiums to increase an average 27 percent.
Patti Embry-Tautenhan, a spokeswoman for BlueCross BlueShield of South Carolina, said federal discounts will offset that hike for most customers. More than 80 percent of South Carolinians who rely on the federal health care law for coverage qualify for subsidies or tax credits to reduce their out-of-pocket cost.
Embry-Tautenhan said beneficiaries will pay about $8 more per month next year.
“The majority of members will be largely insulated from the totality of the rate increase,” she said.
In a press release, Jonathan Gold, a spokesman for the federal Department of Health and Human Services, estimated South Carolina Obamacare customers will pay an average $75 a month next year for coverage, after tax credits and subsidies reduce the price most people pay.
“Consumers in South Carolina will continue to have affordable Health Insurance Marketplace options next year,” Gold said.
Nevertheless, experts have recently questioned the stability of the federal health insurance marketplace in this state. When HealthCare.gov debuted in 2013, four insurance companies offered plans to South Carolina customers. In 2014, five insurers sold plans.
Since then, most of those carriers either folded or decided to exit the marketplace to stem their losses.
Aetna announced in August that it would pull out of the federal marketplace in South Carolina and in 10 other states because the company lost $430 million on Obamacare customers in less than three years.
“If a company like Aetna, whose expertise has been around for 100 years, cannot make money ... somebody has got to take a look at the Affordable Care Act and say, ‘What’s not working?’ ” said Ray Farmer, director of the state Department of Insurance and a member of Gov. Nikki Haley’s Cabinet.
Hypothetically, if BlueCross BlueShield leaves the market in 2018 and no company fills its void, customers in this state could purchase plans from companies “off the exchange,” but they would not qualify for federal subsidies or tax credits to help pay for their insurance. Farmer doesn’t want to see that happen.
“It is one of the highest priorities for myself and our staff to recruit companies for 2018 — 2017 is done,” Farmer said.
But absent federal reform, insurance experts fear the Affordable Care Act marketplace in this state could collapse.
“The rules set out by the Affordable Care Act gave the insurance companies very little wiggle room, if you will,” said Colin Smoak, a benefits adviser based in Mount Pleasant. “Is it sustainable? No.”
Embry-Tautenhan said BlueCross BlueShield of South Carolina has not yet determined if it will participate in the federal marketplace in 2018.
“It would be irresponsible for us to speculate,” she said.
Meanwhile, Farmer said thousands of South Carolinians who bought Obamacare policies this year need to make a choice.
Enrollment for 2017 plans opens Nov. 1. Patients who need coverage starting Jan. 1 must pick and purchase a policy by Dec. 15.
Approximately 113,500 customers in South Carolina are currently enrolled in an Obamacare plan sold by BlueChoice, Aetna or United Healthcare. They will be automatically “cross-walked” to a similar BlueCross BlueShield of South Carolina plan, but Farmer is “encouraging our citizens to be proactively involved.”
He suggested shoppers make their own choice on HealthCare.gov.
“If they do nothing, they’ll be ... auto-enrolled, but don’t leave it up to anyone else to make those choices,” he said.
His agency estimates a 25-year-old, single nonsmoker in Charleston County can purchase a “silver” plan for about $309 a month next year — up from an average $242 for 2016 BlueCross BlueShield plans.
Those prices do not reflect federal subsidies or tax credits that customers may qualify for.
Health insurance prices vary based on county, age and smoking status.
Reach Lauren Sausser at 843-937-5598.