Blue Cross and Blue Shield of Kansas City, the area’s largest healthcare insurance provider, will return to the Affordable Care Act marketplace next year after leaving it in 2018.
The insurer lost more than $100 million on its exchange plans from 2014 to 2017, calling the losses “unsustainable” when it announced in May 2017 that it was dropping out of the ACA, commonly known as Obamacare.
Blue KC had struggled to make more money on the exchange than it paid in claims. But the marketplace is more stable in 2020 and there is new need in the scores of people who have lost their jobs and health coverage during the COVID-19 pandemic, said company officials who announced the comeback on Tuesday.
When the company left, “we really felt like the level of uncertainty and the lack of clarity in that market was just really at an all-time high,” said Jenny Housley, Blue KC senior vice president and chief marketing officer. “And it just made it really difficult for us to plan. So for us, then, given the losses, it made sense to exit.
“We promised … to reassess that decision every year. So we never stopped looking at it. We didn’t want to leave the market. We just had to make a very difficult decision. So we reassessed every year, as promised, and that was a continual process as part of our business operations every year.
“Over the last couple of years we’ve seen premiums in the ACA market stabilize, seem to be at some pretty sustainable levels. So we felt like it was becoming more of an option for us to reconsider entry back into the market.”
The Kansas City region had 87,500 people unemployed in July, compared to 126,000 in April, the highest month of unemployment since the pandemic began in March, according to the U.S. Bureau of Labor Statistics.
The pandemic “really increased the need for this type of insurance offering for the Kansas City community and we just really felt like this was the right time, that Jan. 1 … made the most sense,” said Housley.
In July, the Robert Wood Johnson Foundation reported that the number of people who will lose their employer-sponsored health insurance between April and December 2020 could top more than 10 million.
Some ACA experts anticipate those job losses will lead to an unprecedented number of people signing up for Obamacare this year.
“This is going to be probably the biggest open enrollment in American history,” said Caitlin Donovan, spokeswoman for the National Patient Advocate Foundation in Washington, D.C. “All these people are newly uninsured. Some of them have never gone without employer-sponsored coverage in their entire lives.
“So they’re looking at this marketplace now and they’re going to try evaluating for quality of the plans, which is why a company like Blue coming in might make a really big difference.
“I would say that it seems reasonable that they would look at what’s going on in the country now, with the millions of people who are losing their insurance, and realize that there is a marketplace, quite literally, there for them.”
Blue KC serves more than 1 million customers in a 32-county area. Even after it stopped offering individual ACA plans it continued to offer small group plans through the exchange.
Now it will offer its Spira Care plan to residents in Clay, Platte and Jackson counties in Missouri, and Johnson and Wyandotte counties in Kansas, and access to its new behavioral health program, Mindful by Blue KC.
Residents who live in the other 27 counties served by Blue KC “will have access to a broad portfolio of products on our more traditional networks,” said Housley.
The company will launch a local advertising campaign on Nov. 1, the day open enrollment begins, to spread the word that Blue is back, a move already being welcomed.
“The Unified Government’s Public Health Department strongly supports any effort insurance providers undertake to make high-quality healthcare accessible to everyone, especially at-risk populations,” said a statement from health officials with the Unified Government of Wyandotte County/Kansas City, Kansas.
A steep learning curve
Blue KC’s departure in 2018 affected about 67,000 local customers, most of whom received federal subsidies to buy health insurance on the exchange.
“A lot of people that I know, my clients, were being covered by them,” said Guadalupe Tredway, who supervises community health workers at the health department in Wyandotte County. “When they got out of the Kansas City area people were really discouraged because they were happy with them.
“A lot of people know Blue Cross and Blue Shield so they trust (them). I think this is good news for people who know Blue Cross and Blue Shield.”
Blue KC was the first insurer in the Kansas City area to jump into the ACA marketplace, but the early going was rough, as it was for other insurers who also left.
“There was a lot of learning and a lot of financial loss that insurers incurred in the first few years of the exchanges and they were trying to better understand who this population segment was, what their preferences were,” said ACA expert Jean Marie Abraham, a professor of healthcare administration at the University of Minnesota.
“They had really very little information about a sizable portion of that population that had previously been uninsured, so there’s that piece of it. The market learning. Lots of insurers lost money. A lot of exits happened. Now we are seeing some re-entry, and seeing new entries as well.”
When Blue KC pulled out there were few options for the 67,000 people affected by the move. But it’s a different scene today. The Kansas City market has become increasingly competitive with several insurers, including Ambetter and Cigna serving local ACA customers, said Abraham, “a fairly decent number of insurers competing.”
“And I think Blue KC probably also has to be thinking about what effect that has on other parts of their insurance, other lines of business, in the bigger picture as these insurers kind of get a foothold in Missouri, and what impact that might have on other types of insurance that Blue KC sells, particularly to employer groups, and to some extent Medicare,” said Abraham.
One-stop medical care
Blue KC’s Spira Care is currently only available through employers. Members have access to “enhanced primary care centers” in Kansas City’s Crossroads district, Lee’s Summit, Liberty, Olathe, Shawnee, Tiffany Springs and Wyandotte County, and soon in Overland Park.
They’re designed as a one-stop shop where members have access to concierge-style “care guides,” reflecting what Blue KC members said they wanted their health care to look like, said Housley.
“We met with consumers, and some of them were former members on our plans when we were in the ACA, and said what do you want? How could we make health care better?’” said Housley.
“So much of the feedback was around making the experience less painful, making everything as simple as possible, helping them with navigation. So we built Spira.
“You go into a care center … you get to know your doctor, you have behavioral support, you don’t pay anything while you’re there for preventive services. You can access labs and X-rays and commonly prescribed drugs, and all of that is at your fingertips.”
Planning its return to the ACA marketplace the company met with focus groups — virtually, after the pandemic began.
“What we heard, loudly and clearly, was ‘we want better service and we want more choices,’” Housley said. “So we educated them in these focus groups on Spira Care to see if that seemed to sync up with that, align with what they were looking for. And overwhelmingly, we received positive feedback.
“This is a population that we think has struggled to navigate health care as much as any because the exchange can sometimes complicate that. And this really resonated with these consumers.”
Blue KC offered its new Mindful behavioral health program to its own employees first after the pandemic hit, then to all Blue customers on July 1, Housley said.
Surveys reveal that the pandemic is taking a severe toll on American’s mental health. In August, the Centers for Disease Control and Prevention reported that 41 percent of American adults are experiencing anxiety disorder, depression or other mental distress because of the pandemic.
Demand for Blue KC’s behavioral health support services has risen significantly over the last few months, Housley said, and the company has committed to expand the Mindful program to reduce the stigma attached to mental health services.
“We were in motion on it pre-COVID, but we just expedited the launch because we do believe that the need became that much greater when COVID hit,” said Housley.
Enrolling in ACA
The future of the ACA itself is in question, again, with the death of Supreme Court Justice Ruth Bader Ginsburg just weeks before a case comes before the court in November that some believe could bring an end to Obamacare.
“There is now increased uncertainty around the status of the ACA because of the Supreme Court case pending. So I think for insurers this is an interesting time,” said Abraham. “They are clearly still betting on the fact that the …. ACA will exist, at least in the short run. But it’s worrisome. It’s worrisome for many people for a lot of reasons.”
In the meantime, ACA open enrollment begins Nov. 1 and runs through Dec. 15 for coverage beginning Jan. 1, 2021.
For someone signing up for the first time, Abraham said, “they need to expect that it’s going to take a bit of time to shop and to learn about key insurance concepts they’re not familiar with about buying health insurance … all the terminology.”
She said the government website — HealthCare.gov — “is fairly user-friendly. I think the key is not to wait until the last minute because it does get overloaded. It can be slower, there can be kind of quirks. So plan early.”
People should also visit the website of the insurance companies where they’ll find more details and advice on how to select a plan, Abraham advised.
“People need to really understand when they are choosing a plan, they’re often choosing their access to medical care providers, the hospitals and physicians,” Abraham said.
“That can be an important factor for people and it’s worth taking time to make sure when you buy a health plan that you understand what you’re getting, and also which providers, which hospitals, which physicians, you can access.”