Wellmark announced Tuesday that it will no longer offer individual health insurance plans in South Dakota. Here’s Wellmark VP Laura Jackson’s pleasant farewell to 8,000 South Dakota policyholders:
Here’s the text sent to policyholders:
As you know, Wellmark’s mission is to create affordable health insurance for people to access quality health care. For the majority of the past 75 years, we’ve been able to achieve that. Unfortunately, for the past two years, our members with individual health plans in South Dakota under the Affordable Care Act (ACA) have had to endure double-digit increases. In addition, Wellmark has lost approximately $32 million over the last two years in this market in South Dakota. We’ve discovered as this year goes on, that we expect these trends to continue unless changes are made at the Federal level. It’s apparent that continuing to offer plans with broad networks, combined with the rich benefits of the ACA, are not consistent with managing continually rising costs.
While we could seek additional premium increases to mitigate rising costs, this is not sustainable for our members’ pocketbook. Therefore, in South Dakota, Wellmark will no longer sell or renew individual ACA plans with a Jan. 1. 2017, effective date. This affects less than 8,000 (2%) of our 378,000 members in South Dakota. Members who currently have an individual ACA plan will continue to have coverage through Dec. 31, 2016.
The change above does not affect people with grandfathered or grandmothered plans (those that generally purchased their individual health plan prior to Jan. 1, 2014). It also does not affect our members with plans through their employer or those with Medicare supplement plans.
Although the ACA has done many positive things, it has also had its challenges. Those challenges vary by state. Fortunately, in 2017, the ACA gives states the ability to begin addressing those challenges with the goal of stabilizing the individual under 65 health insurance market. We look forward to working with South Dakota policymakers on those solutions in the near future [Wellmark news alert, 2016.09.27].
Wellmark is canceling plans in Iowa, too, to address $99 million in losses there over the last two years. However, Wellmark says it doesn’t have to cut off as many policyholders in Iowa as in South Dakota, because Iowa allows the more restrictive HMOs that South Dakota does not.
Wellmark isn’t cutting its employer-based coverage in South Dakota or Iowa, so once again, our Rube Goldberg health coverage system is deterring independent entrepreneurship and pushing people to work for bigger companies instead of working for themselves.
For the sake of individual entrepreneurship, not to mention sparing individual policyholders the hassle of having to change insurers due to the vagaries of the for-profit market, it’s time to let Americans buy into the largest, most reliable health insurance pool in the country (56.9 million enrollees in July 2016, compared to 26.2 million and 22.1 million for the nearest competitors). Enact the public option. Let working Americans choose to enroll in Medicare.
p.s.: Wellmark has 378,000 members in South Dakota—apparently 370,000 as of January 1, 2017. Medicare covers 160,000 enrollees in South Dakota, up from 139,000 in 2011.