“One of the nation’s largest health insurance companies plans to enter the Obamacare marketplace in the Chicago area for the first time, bringing new competition as other insurers exit or go out of business.
The Tribune has confirmed that Cigna, based in Bloomfield, Conn., has filed plans to sell health policies to individuals and families who purchase their own coverage in the individual market. If the plans are approved by Illinois regulators, Cigna will start selling policies Nov. 1, when enrollment for 2017 Obamacare coverage opens.
Cigna spokesman Joe Mondy said the company is focusing on the Chicago area and not the entire state. He said it was premature to provide details about proposed provider networks, benefits and the cost of insurance until the company’s rate filings are approved and the health plans are ready for sale.
Cigna’s arrival is some welcome news for consumers who face uncertainty over their 2017 Obamacare medical plans on the Illinois health insurance exchange. Insurers have struggled with rising medical costs under President Barack Obama’s landmark health law, the Affordable Care Act. At least two companies will not be back on the Illinois exchange next year.
UnitedHealthcare, the nation’s largest health insurer, is leaving after just two years of minimal participation — part of a broader pullback nationwide after the company had larger-than-expected losses on individual plans.
Chicago-based Land of Lincoln Health, a 3-year-old startup that sold plans throughout the state, has collapsed after suffering heavy losses. Its 49,000 enrollees are scrambling to find new coverage for the rest of the year.
Humana is pulling out of several state exchanges but has not identified which ones.
Even those that remain in the marketplace are rethinking what they offer for 2017 in an effort to control costs for a population that turned out to be sicker than the insurance companies expected.
Aetna will discontinue its preferred provider organization, or PPO, plans called “Savings Plus” in Illinois, a company spokesman confirmed. The elimination of those medical plans will force about 12,000 policyholders to find another plan, said spokesman Rohan Hutchings.
The Savings Plus plans were not offered on the Illinois online exchange but consumers could purchase them directly from Aetna or through an insurance broker. Because the plans were not sold on the exchange, buyers were not eligible for Obamacare subsidies that lower the cost of premiums.
Aetna, based in Hartford, Conn., will introduce new health plans in the next few months and “will work very closely with impacted members so they understand these new products, the choices available to them and their best option,” Hutchings said. He added that “there may in fact be a better, more convenient, more affordable product available to them.”
Aetna’s on-exchange medical plans in 2016 focus on an HMO called “Whole Health Chicago.” Its Coventry subsidiary sold a PPO plan last year but it’s unclear if that product will return.
The elimination of Aetna’s PPO in the individual market follows a similar move by Blue Cross and Blue Shield of Illinois last year, underscoring a shift away from broad provider networks in Obamacare plans. PPOs give subscribers access to a wide array of doctors and hospitals but they can be more expensive to operate than HMOs, where the care is coordinated by primary care doctors who have to provide referrals to specialists.
Health plans are trying to better manage the Obamacare population by also restricting consumers’ choice of doctors and hospitals in so-called narrow network plans. In exchange for fewer choices, patients pay lower premiums.
But narrow networks and HMOs haven’t solved all of the challenges of insuring people who don’t get coverage through their jobs or government programs such as Medicare and Medicaid.
Insurers across the country are seeking double-digit rate hikes for Obamacare plans in 2017, raising questions about whether consumers can find affordable, quality coverage in the state marketplaces. The Obama administration counters that federal subsidies will spare most consumers from the full impact of most premium increases and says the health law enables people to shop for a better deal.
Illinois consumers are scheduled get a glimpse of Obamacare premiums for 2017 when rate proposals are published Monday on ratereview.healthcare.gov. All eyes will be on Blue Cross, the dominant insurer on the Illinois exchange, which has posted heavy losses on individual plans in 2014 and 2015.
Cigna’s entry, though, may temper some of the Obamacare critics who have questioned the viability of the Illinois marketplace in light of insurers’ financial losses.
Mondy, the Cigna spokesman, said the company’s participation in the Chicago area market is part of a selective expansion of its presence in individual markets in a “few new geographies.” Cigna currently offers plans on public exchanges in seven states. It also sells off-exchange policies in six additional states.
In Colorado, for example, Cigna offers an on-exchange plan that features what it calls an “exclusive provider organization.” Policyholders don’t need a referral to see an in-network specialist, but the medical plan does not pay for care provided by a doctor who is not in the network, according to the company’s marketing materials.