Common Ground to Exit ACA Marketplace in 11 Wisconsin Counties
An estimated 24,000 people, including thousands in Milwaukee, will need to find a new insurer next year.
Connor Tarter (CC-BY-SA)
A health insurance provider will stop offering individual and family coverage through the Affordable Care Act marketplace in 11 Wisconsin counties next year, meaning about 24,000 people will have to find a new insurer.
Common Ground Healthcare Cooperative plans to stop offering marketplace plans in Milwaukee, Kenosha, Racine, Outagamie, Winnebago, Fond du Lac, Sheboygan, Calumet, Dodge, Waushara and Waupaca counties beginning in January.
A spokesperson for CareSource, the parent company of Common Ground, said in a statement that it had made “the difficult decision to exit 11 counties.” The spokesperson said about 24,000 affected members will continue to receive coverage through 2025 but will have to look for a new health plan when open enrollment begins Nov. 1.
“This decision was not made lightly and is driven by the need to maintain sustainable operations amid rapidly shifting dynamics across the industry,” the statement reads.
Common Ground will continue to offer coverage in 13 Wisconsin counties: Brown, Door, Green Lake, Jefferson, Kewaunee, Manitowoc, Marinette, Oconto, Ozaukee, Shawano, Walworth, Washington and Waukesha.
Common Ground has been offering ACA marketplace coverage in eastern Wisconsin since 2014. On its website, Common Ground said the decision to discontinue coverage in parts of the state was not related to its recent merger with CareSource.
“This was a necessary business decision made by Wisconsin leadership,” the website reads. “The decision was driven by the rising cost of providing care in these counties.”
As of December 2023, Common Ground was in “good financial condition,” according to a report from state regulators. The cooperative experienced “notable losses” in 2021 and 2022, but had “positive financial results in 2023,” the report states.
Common Ground’s exit comes as ACA marketplace insurers across the country are planning to increase premiums next year by about 20 percent on average, citing higher costs and the expected expiration of enhanced pandemic-era tax credits, according to health policy nonprofit KFF.
Enhanced premium tax credits were signed into law during the Biden administration, allowing families previously ineligible for ACA tax credits to become eligible. They helped lower premiums and drove record enrollment on the marketplace, according to the nonprofit Center for American Progress. But the enhanced subsidies are set to expire at the end of the year unless they’re renewed.
Dan Sacks, an associate professor of risk and insurance at the University of Wisconsin-Madison School of Business, said the expected end of enhanced tax credits likely factored into Common Ground’s decision. That’s because subsidies help people who wouldn’t get insurance due to the cost to gain coverage, he said.
Without the enhanced premium tax credit, he said healthy people could choose to go uninsured, leaving the pool of customers smaller with a larger share being individuals with chronic conditions who are typically more expensive to insure.
“Generally, when they take away the subsidies, it’s less profitable to offer insurance,” Sacks said. “It makes sense that an insurer would want to drop out.”
KFF also found that the end of the enhanced subsidies would make ACA insurance premiums “an average of 4 percentage points higher than they otherwise would be.”
Gov. Tony Evers joined 17 governors this week in sending a letter to federal lawmakers, urging Congress to extend the enhanced subsidies to “spare families a wave of sticker shock this fall.”
“Far too many are feeling the pressure of rising costs, and folks should never have to choose between life-saving healthcare and getting their prescriptions or putting food on the table and keeping a roof over their head,” Evers said in a statement.
Beyond plans to hike premiums, some insurance providers are leaving the ACA marketplace altogether.
Another ACA insurance provider in Wisconsin, Chorus Community Health Plans, also announced it will exit the Affordable Care Act Marketplace in 2026, a move affecting about 11,000 Wisconsinites in 15 counties, according to a statement from the provider.
The statement cited a “multi-year declining financial performance.” Chorus’ Affordable Care Act line of business produced an underwriting loss of $2.9 million in 2022 and a loss of $8.5 million in 2023, according to a report from state regulators.
Although not in Wisconsin, CVS Health’s Aetna will also stop offering individual and family plans on the ACA exchange after 2025, citing substantial financial losses, according to Forbes.
Sacks said more insurers could stop offering ACA coverage without the enhanced premium tax credit because these are “hard markets to make money in for insurers.”
He also said insurers have entered and exited “pretty much in lockstep” with the ebbs and flows of federal support for the ACA marketplace.
“There were a bunch of subsidies in place to help the markets get off the ground in 2014 and 2015, and by the end of 2016 a lot of those had left — and we saw insurers entered and then exited,” he said. “When the enhanced premium tax credits came in, we saw a lot more entry of insurers, so it would not surprise me if a lot of insurers exit when these subsidies go away.”
Insurance provider will stop offering Affordable Care Act coverage in 11 Wisconsin counties was originally published by Wisconsin Public Radio.
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