For most of its brief existence, the Washington Health Plan Finder looked like a model state-run exchange. Nine carriers representing a good mix of commercial and Medicaid players filed to sell policies. The state moved quickly to build its exchange infrastructure and chose to operate as an active purchaser, requiring insurers to bid on exchange business.
Then Washington Insurance Commissioner Mike Kreidler rejected half of the MCOs that applied to sell policies.
Active purchaser models have worked fine in California and Vermont, and few plans have been rejected in state-run exchanges. One of the most widely known rejections came in Vermont where regulators shot down the state CO-OP with a laundry list of grievances, including unrealistic enrollment expectations and a CEO tapped to earn more than the state's Blue plan CEO.
Washington's rationale for the rejections ranged from inadequate provider and pharmacy networks to unmet regulations for consumer-driven health plans. The rejected carriers were hardly Washington newcomers. The commissioner denied Kaiser Foundation Health Plan of the Northwest and Moda Health Plan, plus three Medicaid MCOs (Centene's Coordinated Care Health, Molina Healthcare of Washington; and Community Health Plan of Washington). Only four plans from three carriers won approval: Regence subsidiary Bridgespan Health Co.; Group Health Cooperative; and Premera Blue Cross, which will also sell policies through its individual subsidiary, Lifewise Health Plan.
That places Washington on very unsteady footing. In some counties, Washington's uninsured might have just one plan option on the exchange. They could buy policies outside the exchange, but would not receive the subsidies for which most are eligible. The Medicaid MCO rejections are of great concern because those carriers launched commercial products mainly to preserve coverage continuity for members who move in and out of Medicaid eligibility. Residents could be forced to change carriers if their eligibility changes.
A small pool of insurers could inhibit enrollment, especially in the state's vast rural areas outside Seattle and Spokane. Rejecting Kaiser has major implications for the Washington portions of the Portland MSA, where Kaiser has the largest market share.
The tide still could turn for those rejected carriers. The exchange board showed reluctance to approve the exchange carriers with such limited competition and pushed back against Kreidler's recommendations. By not spreading around the risk, the remaining carriers could also open themselves up to adverse selection, since the sickest of the uninsured will likely enroll first. The board suggested a deadline extension to allow the carriers to fix their issues; with Oct. 1 looming, any delay could hamper launch of open enrollment.
Absent a reversal of those rejections, Washington's exclusive club of exchange insurers could lead to numerous consumer snafus, and potentially diminish a once-promising exchange.
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