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Optima to sell health plans in Halifax / September 07, 2017
On the heels of Anthem’s exit from Virginia’s individual health insurance market, Optima Health will expand into Halifax County to give local consumers at least two coverage options to choose from in 2018.

Optima announced Wednesday that it is expanding into markets where Sentara Healthcare operates hospitals and physician practices. Optima, a subsidiary company of Norfolk-based Sentara, will offer individual health plans in Halifax both on and off the Affordable Care Act exchange, better known as Obamacare.

“From day one, our desire has been to find a way to stay in the ACA Exchange,” said Michael M. Dudley, president and CEO of Optima Health in a statement issued Wednesday. By entering markets where Sentara has a strong presence, Optima will provide health insurance options for some 70,000 Virginians who no longer can turn to Anthem for coverage.

While Halifax is one of the areas that will benefit from the decision — Mecklenburg, Harrisonburg, Hampton Roads and Charlottesville are among others — Optima also is pulling out of markets where Sentara has no operations. In 2016, Optima offered coverage statewide; this year the company limited health plans to a handful of communities, including Lynchburg and Roanoke.

“The decisions we made were challenging ones given the recent changes and ambiguities in the marketplace,” said Dudley, referring to the reshaping of Optima’s coverage area in 2018.

Until yesterday’s announcement, Halifax County residents were looking at a single choice next year on the exchange: Piedmont Community Health Care, based in Lynchburg.

Carolyn Neal, who advises local clients as a principal at The Neal Agency in South Boston, said that when Anthem announced in August that it would no longer sell individual plans in Virginia, people “freaked out” over losing their health insurance. “If I described it in one word, it would be ‘shock,’” she said.

Neal noted that Optima was active a couple of years ago in Halifax County, offering a mix of plans that varied by the scope of provider networks, but Anthem has been the go-to choice for most local residents since Obamacare began. Anthem accounts for roughly 90 percent of the individual policies that The Neal Agency sells in the area, she estimated.

“I guess [Optima] assumed that when Anthem did their pullout, they’d get back in,” said Neal.

Anthem markets health insurance to some 210,000 people in Virginia, making it by far the state’s largest provider of individual coverage. While all Virginia localities will have at least one provider next year on Obamacare exchanges, the number of competitors has dropped markedly: Anthem, United Healthcare and Aetna all are pulling out of the state in 2018, affecting an estimated 350,000 Virginians.

While Optima is sticking with Obamacare, it will focus on markets where Sentara has hospitals and doctors in order “to better manage chronic conditions to keep members healthy,” according to Wednesday’s announcement. The company is also raising premiums — a move that will have little impact for most prospective customers in Halifax County, although some purchasers may be hit hard.

The difference lies in whether individuals receive federal tax subsidies to purchase their Obamacare policies. In its statement, Optima noted that participants receiving ACA tax credits will see a 1.5 percent premium increase, about $4 a month, because any additional costs will be offset by sliding-scale Obamacare tax credits.

However, customers who do not quality for tax subsidies — the income cutoff for a family of four is $97,200 — will bear the full brunt of Optima’s 2018 premium increase: a whopping 81.8 percent, on average.

The company explained that it had decided to raise premiums by 20 percent in 2018, but later added another 23 percent increase due to uncertainty over whether Washington would continue to make cost-sharing reduction (CSR) payments to stabilize Obamacare markets. The CSR payments have been delayed by the Trump Administration in tandem with the failed Republican effort to repeal the 2010 health care law. The rest of the premium increase — roughly 40 percent — “is caused by the withdrawal of the national carriers” such as Anthem and Aetna, Optima officials noted.

“Health care is an ever-changing landscape,” Dudley said. “While this is not the outcome we had hoped, it will allow us to continue to serve 80 percent of our existing members and provide an option for another 70,000 Virginians who are losing their current insurance plan.

“We believe it is important to continue serving as many people as we can and fulfill our mission to improve health every day. The only other alternative would have been to completely exit the Exchange, and that goes against our mission,” he added.

Seventy percent of Virginians who participate in the ACA exchange and receive tax subsidies will be shielded from the brunt of the premium increase, Optima officials noted. That leaves 30 percent who will be facing the nearly 82 percent price hike in 2018.

In Halifax County, only a small percentage of residents earns too much to quality for Obamacare tax subsidies. Neal said that she was informed by Anthem that 95 percent of local purchasers received federal assistance to afford coverage.

A small number of policyholders still have “grandfathered” individual health insurance plans that pre-date Obamacare. Neal, who is one such consumer, said she was hit with a 66 percent increase in her premiums in the coming year. “I’m still on old Anthem,” she said.

The changes roiling the individual market have little if any impact on employer group health plans and federal programs such as Medicare and Medicaid. Anthem and Optima each will continue to provide plans in those market segments in 2018.

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