Nevada's Obamacare markets are facing a nightmare scenario

Nevada's Division of Insurance said Monday that Anthem, the largest provider of Blue Cross Blue Shield plans in the country, would pull out of the state's 2018 individual insurance exchanges under the Affordable Care Act.

Anthem will no longer offer plans in the three counties in which it was planning to participate next year. The insurer had already announced in July plans to exit 14 rural counties in Nevada.

The newest round of departures in Clark, Washoe, and Nye counties will not leave additional Nevadans without an option on the Obamacare exchange for 2018. (The earlier exits have left those 14 counties with no options on the Obamacare marketplace next year.)

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"While the Division is disappointed in Anthem's latest decision regarding its withdrawals, we believed that it was in the interest of the Nevada public to let consumers know about the Anthem decision as soon as possible," Barbara Richardson, Nevada's insurance commissioner, said in a statement. "The Division is continuing to work with our state partners on attracting an insurance carrier to serve the 14 bare counties and to support the stability of the market for those insurance carriers who remain."

Richardson also cited rising costs and uncertainty surrounding the Trump administration's decision regarding key payments to insurers, known as cost-sharing reduction (CSR) payments, as reasons for Anthem's exit.

"Based on the rate submissions the Division of Insurance received from Anthem, they proposed an average rate increase of 62%," Richardson said. "This proposed rate increase did not reflect the potential elimination of payments to insurance carriers for Cost Share Reductions (CSRs). Loss of the Cost Sharing Reduction payments has the potential to increase further rates in the Nevada market."

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In a statement, Anthem pointed to enrollment and policy uncertainty over CSRs and the possibility the Trump administration stops enforcing the penalty for not buying insurance as reasons to leave the state.

"Today, planning and pricing for ACA-compliant health plans has become increasingly difficult due to a shrinking and deteriorating individual market, as well as continual changes and uncertainty in federal operations, rules and guidance, including cost sharing reduction subsidies and the restoration of taxes on fully insured coverage," the statement said.

Insurers are facing an end of August deadline to lock in rates for most states next year, and contracts for 2018 exchange offerings must be locked in by the end of September.

Nevada is perhaps worst off of all states in terms of outlook for Obamacare's future. Wisconsin, Ohio, and Indiana each have a single county without an insurer, but the widespread blank spots for Nevada require a more large-scale fix.

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Health policy experts have described counties with no insurers described as the "worst-case scenario" for the Obamacare markets. There is no back-up plan for empty counties, so if the state government can't convince another insurer to step in, anyone with coverage through those exchanges would likely go without it in 2018.

Anthem's moves come despite relative support from Republican Gov. Brain Sandoval for the exchanges and for more people getting covered through Obamacare. Sandoval was a staunch opponent of every proposal congressional Republicans put forward to repeal and replace Obamacare.

Perhaps most importantly, the future of Nevada's Obamacare market could also become a major sticking point during GOP Sen. Dean Heller's re-election bid in 2018. Democrats have identified Heller's seat as a possible pick up and given the map for the midterm elections, it could be one of the most hotly contested races next year.

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