A dozen insurers opt out of South Carolina small group and individual markets
Nearly a dozen health insurance companies are leaving South Carolina, according to the state’s Insurance Department. These insurers are refusing to write new health policies in the state, citing new regulations introduced by the Affordable Care Act. These regulations are placing significant financial strain on some companies and smaller insurers are finding it difficult to comply with some of the federal law’s provisions. As such, pulling out of the individual and small group markets of South Carolina has become a viable option.
Some 30,000 consumers to be affected by exodus
According to the South Carolina Insurance Department, some 30,000 people will be affected by insurers pulling out of the state’s market. Another 150,000 are being forced to find new health insurance policies due to the cancellation of policies that are considered substandard by the Affordable Care Act. The state agency has issued guidelines to insurers that are interested in extending the lifetime of substandard policies, but some insurers are opting to pull out of the state market rather than provide extensions to policyholders.
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Insurers may have a chance to continue participating in state markets
The insurers that are pulling out of the state market will not be able to participate in South Carolina’s small group and individual sector for five years, per state law. Some may be able to skirt this law, however, thanks to a waiver provided by the Insurance Department. The agency is keen to ensure that the availability of insurance policies remains relatively high in order to offset the financial strain that consumers are experiencing due to the cancellation of their policies.
Exodus sparks confusion among consumers concerning large insurance providers
The exodus of some companies has caused some confusion regarding whether larger health insurance providers, like Aetna and Cigna, would continue writing new policies or not. Some of this confusion is linked to these large companies opting not to participate in state insurance exchanges. While large insurers may not be participating in the exchanges of some states, they are still writing policies in the private market.