Washington - Anthem and other US 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, Humana, and Aetna pulled out of most of the government subsidised health insurance market.
But now that the new Trump administration and Republican lawmakers control the future of health care, 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, was set to meet with insurance industry executives yesterday.
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 health care industry lobbyist.
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.
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That clout may explain Anthem chief executive Joseph Swedish’s optimism in comments to investors earlier this month that policymakers would introduce new enrolment rules limiting when people can opt into coverage.
“We do have some positive indicators that stabilisation could very likely occur,” Swedish said. A day later, the Trump administration took its first concrete stab at Obama’s Affordable Care Act, proposing regulations that would shorten the enrolment 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 stabilisation 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 10million people.
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 programme for the poor.
A copy of the administration's February 10 working draft leaked out on Friday. But it was not clear whether there was enough support for all of the measures or how it would evolve.
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.
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 20million people, which failed to materialise.
Anthem insures more than 800000 people in the Obamacare exchanges - the single biggest portion.
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. But Obamacare customers comprised only about 4percent 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 by 20percent in 2018.
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.
Ed Haislmaier, senior health policy research fellow at The Heritage Foundation, helped draft the proposed stabilisation rule Trump announced on February 2.
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 US health insurance and that lawmakers agreed last year to set aside for a year.