Wellmark to sell policies on Obamacare exchange for 2017

Iowa’s dominant health insurer has agreed to start selling policies a year from now that qualify for Obamacare subsidies.

Wellmark Blue Cross & Blue Shield has not participated in the Affordable Care Act’s online health insurance marketplace, which launched in the fall of 2013. The main effect of the company’s decision was that moderate-income Iowans could not choose Wellmark insurance if they wanted to purchase policies that qualified for new federal subsidies to help pay premiums.

Other insurers have participated in the marketplace, also known as an exchange. Three carriers are selling policies statewide for 2016. Wellmark announced Monday that it will start selling policies on the marketplace for 2017, because the online system has become more reliable and because the legality of the federal subsidies has been upheld by the U.S. Supreme Court.

“We’ve said from day one we’d be there, and we meant it,” Wellmark Chairman John Forsyth said in an interview Monday.

Most other Blue Cross plans nationally have participated in their states’ exchanges, and Iowa’s governor and insurance commissioner encouraged Wellmark to do so. But Forsyth correctly predicted in 2013 that the Obamacare website wasn’t going to work well. Wellmark leaders also said existing policy holders could be harmed if the company lost money in a new market with unclear financial risks.

Forsyth said he supports the idea of having the government subsidize premium payments of moderate-income Americans. But Wellmark saw before the launch that the electronic marketplaces were poorly designed, he said.

“We were convinced it was going to be an awful experience” for consumers, he said.

The Obamacare website routinely crashed or froze in its first months of service, embarrassing the Obama administration and frustrating consumers and insurance agents.

The front end of the website, which consumers see, has gotten much better since then, Forsyth said. But there still are serious problems in the back end of the site, which insurers must use to fulfill orders, he said. “I’m surprised it took as long as it did to fix it.”

He expressed confidence that the whole system would be running well by next fall, when 2017 policies go on sale.

Wellmark is the best-known health insurer in Iowa, where it sells more than three-quarters of individual policies. Critics have said Wellmark’s reluctance to join the Obamacare exchange discouraged Iowans from checking out their options and realizing they might qualify for subsidies. Just 18 percent of Iowans who might qualify for such subsidies obtained them for this year, according to a report from the Kaiser Health Foundation.

Forsyth said some customers left Wellmark to purchase other companies’ policies and obtain the subsidies. But he said overall, the company is selling more individual policies now than before the Affordable Care Act took effect.

Thousands of longstanding Wellmark customers have been able to retain plans that predate implementation of the Affordable Care Act. Some of those people are slated to lose access to those policies in October 2016, Forsyth said. They might gain an incentive to consider other companies’ plans, but he said that possibility was not a major factor in Wellmark’s decision to join the exchange.