Another Indiana company has decided to Not offer coverage in 2017. Physicians Health Plan of Northern Indiana will be exiting BOTH On and Off Exchange marketplaces for 2017. Members 2016 coverage will not be changed or affected in any way and will remain in effect until Dec. 31, 2016. Members will be notified in September of PHP’s decision advising them to contact their insurance agent or broker for 2017 health insurance options.

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PHP Indian Leaves Obamacare

“We are disappointed that we are forced to make this difficult decision,” stated Michael Cahill, President and CEO of PHP, “but we have to keep in mind that we do have a responsibility to the community and the beneficiaries we serve, as a not for profit health insurer. We are committed to supporting our communities over the long term, yet believe that withdrawing from the market and refocusing our efforts on group insurance coverage and administrative health insurance services is a better use of PHP resources. By withdrawing from the individual market today, PHP can redirect the millions of dollars in losses we would incur and invest that money in areas with greater potential outcomes while continuing our mission with our beneficiaries who have relied on us since our founding in 1983.”

A PHP press release states it remains extremely well capitalized and on solid financial ground. However, Three Critical Factors of the Individual Product Decision In 2016, for every premium dollar received, PHP of Indiana estimates it will pay $1.20 for medical expenses. PHP estimate this number would increase to $1.36 in 2017. This loss in premium does not begin to cover operating costs or overhead. The deficiency is attributed to three factors:

• The Risk Adjustment Program, which was intended to move monies between health insurers based on the relative cost of the populations  attracted. It did not take many measures into account and was not designed for the commercial Indiana insurance marketplace.
• The Risk Corridor Program, put in place to keep premiums down and make products affordable in the early years, was ultimately not funded by Congress leaving most insurers with large, unexpected medical costs.
• Adverse selection due to certain anomalies between federal mandates and state mandates for Indiana health insurance has left some insurers, including PHP, unprotected in several areas.