Broker says Anthem's new short-term plan will undermine Obamacare; Anthem says it's designed to complement ACA plans

Screenshot of Anthem Enhanced Choice website

By Melissa Patrick

Kentucky Health News

This story has been updated to reflect that the Anthem Enhanced Choice plans cover all 10 of the required Essential Benefits that are included in the Affordable Care Act. .

Anthem Blue Cross Blue Shield is offering a new, short-term health plan that one insurance broker says could lead to destruction of the Patient Protection and Affordable Care Act, often called Obamacare.

Joel Thompson, a longtime independent broker at LessSellingMoreHelping.com, says six new Anthem plans called "Enhanced Choice" are being marketed as an alternative to ACA plans for healthy people who make too much money to qualify for financial assistance through a tax credit on an ACA plan. 

"What this could have the effect of doing," Thompson said, "is to draw the healthy people out of the ACA insurance pool and take us a step closer to the dreaded death spiral, as far as only the unhealthy being given coverage through the ACA."

Anthem disagreed, and said its new plan is offered as a complement to its ACA marketplace plans, not as a replacement. 

"Anthem offers 2021 ACA marketplace options in every county in Kentucky and is committed to the individual market," Anthem spokesman Jeff Blunt said in an e-mail. "We also know that one size does not fit all in health care. Marketplace plans are a great option for many, but not all." 

He said the plans "were designed as an option for those who don’t qualify for a federal subsidy or have access to employer-sponsored health plans: the working uninsured, for example. Especially now, in the wake of the pandemic, we must find new ways provide more Kentuckians affordable access to care."

Anthem, the nation's second largest health insurer, is offering Enhanced Choice in Kentucky, Indiana, Ohio, Missouri, Wisconsin and Georgia. 

Open enrollment runs through Dec. 15 on healthcare.gov for ACA plans that will take effect on Jan. 1. Short-term plans like Enhanced Choice are not sold on the marketplace and can be bought at any time. 

On its website, Anthem calls the new plan a budget-friendly option for people without health coverage who do not qualify for ACA subsidies. It notes that "Coverage and cost varies based on where you live, the plan you choose, your age, gender, medical history and tobacco usage." 

Thompson said, "The bottom line -- this is pre-existing conditions being snuck into the system by Anthem. It's like a fly in the oatmeal. It's something they are hoping people don't see, but it has the potential to being the first step toward destroying the ACA marketplace." 

The Anthem website that offers details of the Enhanced Choice plan says it is not required to comply with certain federal market requirements for health insurance, principally those contained in the ACA, and that consumers need to "check your policy carefully to make sure you are aware of any exclusions or limitations regarding coverage of pre-existing conditions or health benefits."

Blunt said the plan covers the 10 essential benefits required by the ACA, including hospitals, prescriptions, office visits to physicians and specialists, urgent and emergency care and 100% payment for preventive care, pregnancy, maternity, and newborns; mental health and substance use disorder treatment;  rehabilitative and habilitative services; laboratory services; and pediatrics. It also covers telehealth visits, which have become increasingly common during the coronavirus pandemic. 

The Anthem website notes that Enhanced Choice may have limits on lifetime and/or annual dollar limits on health benefits. That appears to be $1 million per member, per benefit period, according to the website. Expiration or loss of eligibility for coverage could result in having to wait until the next open enrollment period begins to get other coverage. 

Thompson, who is based in Ceredo, W.Va., near Ashland, said Anthem has made the plan attractive to Kentucky consumers by offering a network of providers for it that is wider than those for its ACA plans. 

And, he said, they have made it more enticing for brokers by paying twice as much commission on sales of the plan than what it pays for selling an ACA plan. Anthem says that this added commission is offered to accommodate a more laborious enrollment process than is required with ACA plans. 

The Enhanced Choice plan also allows a consumer to apply only once for nearly 36 months of continuous coverage.

Blunt said the plan is already generating a lot of interest: "In just the first two weeks of Anthem Enhanced Choice availability in Kentucky, we’ve seen a tremendous response both in terms of consumer interest and enrollment."

Thompson recognized the attractiveness of this new plan for healthy Kentuckians who make more than 400 percent of the federal poverty level, which is the cut-off for a marketplace subsidy. Without a subsidy, Thompson said, ACA plans can be "quite expensive."

In order to get the tax credit for ACA coverage starting in 2021, an enrollee must make between 100% and 400% of the poverty level. "In 2021, the subsidy range in the continental U.S. is from $12,760 to $51,040 for an individual and from $26,200 to $104,800 for a family of four," according to the Kaiser Family Foundation.  

Thompson said, "Frankly, if I'm in the best interest of the consumer, there's no way I would not show them this plan, even though I totally oppose its existence, because my role is to always work in the best interest of the consumer." 

Nevertheless, he added, "It's not something that I think needs to be or should be competing with the ACA."

Thompson said the ACA works because all the underwriting differences have to be uniform across all carriers. "What Anthem is doing here is saying, 'Hey, we're going to be offering something that's off the market,' but it has the severe potential of disrupting the market, especially if it catches on," he said. "This is more of a threat to the ACA than what's in the Supreme Court, by far."

The court heard arguments last week in a challenge to the ACA's constitutionality, but justices' comments indicated that they were unlikely to throw out the law.