Iowa, South Dakota Blues to Skip Insurance Exchange Next Year

Health insurer Wellmark Blue Cross and Blue Shield will not offer individual plans next year on the health insurance exchanges in South Dakota and Iowa, according to a report by Kaiser Health News.


In a news release, Wellmark Chairman and CEO John Forsyth said that while the company will continue to sell individual coverage outside the subsidy-eligible online marketplaces, "given what we know today, we do not believe during the first year of the public exchange we could ensure the exceptional level of service our members [in Iowa and South Dakota] have come to expect from Wellmark." Instead, the company has "decided it is in our members' best interest to delay our participation in the public exchange until 2015."

 

Industry experts have attributed some insurers' hesitance to join the exchanges to fear the earliest enrollers on the exchanges will disproportionately be sicker, costlier customers with pre-existing conditions.

The news could be a blow to the competitiveness of the exchanges against the status quo of Wellmark's dominance in the individual markets in those states — holding 80 percent of such policies in Iowa and about 70 percent of those in South Dakota, according to the report, although six insurers will sell plans on Iowa's exchange.

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