Common Ground Healthcare Cooperative, a health insurance provider in Wisconsin, has announced it will discontinue its Affordable Care Act (ACA) marketplace plans in 11 counties starting in January 2025. This decision will require approximately 24,000 current members to find new health coverage during the upcoming open enrollment period.
The company cited the need to ensure long-term financial stability and rising healthcare costs in the affected regions as primary reasons for the withdrawal. This move reflects a broader national trend of insurers re-evaluating their participation in ACA markets amid economic pressures and the potential expiration of federal subsidies.
Key Takeaways
- 24,000 Members Affected: Common Ground Healthcare will no longer offer ACA plans to this group after 2024.
- 11 Counties Impacted: Coverage will cease in Milwaukee, Kenosha, Racine, and eight other eastern Wisconsin counties.
- Reason for Exit: The company points to rising care costs and the need for sustainable business operations.
- Broader Trend: The decision comes as federal premium subsidies are set to expire, potentially increasing costs for consumers and financial risks for insurers.
Common Ground Healthcare to Withdraw from Key Wisconsin Markets
Common Ground Healthcare Cooperative, which operates under its parent company CareSource, will exit the ACA individual and family plan marketplace in several key Wisconsin counties. The company confirmed that current members in these areas will maintain their coverage through the end of 2024.
However, these 24,000 individuals must select a new insurance provider for 2025 when the open enrollment period begins on November 1.
In a statement, a spokesperson for CareSource described it as a "difficult decision to exit 11 counties." The company elaborated on its website, stating, "This was a necessary business decision made by Wisconsin leadership. The decision was driven by the rising cost of providing care in these counties."
Counties with Discontinued Coverage
The provider will stop offering ACA plans in the following counties:
- Milwaukee
- Kenosha
- Racine
- Outagamie
- Winnebago
- Fond du Lac
- Sheboygan
- Calumet
- Dodge
- Waushara
- Waupaca
Common Ground has been a participant in the Wisconsin ACA marketplace since 2014. The provider will continue to offer coverage in 13 other counties, including Brown, Jefferson, Ozaukee, and Waukesha.
Company Financials
According to a report from state regulators, Common Ground was in "good financial condition" as of December 2023. This followed a period of "notable losses" in 2021 and 2022. The cooperative reported positive financial results in 2023, but the latest decision suggests ongoing concerns about profitability in specific markets.
Financial Pressures and Expiring Subsidies
The decision by Common Ground is not happening in isolation. It aligns with significant financial pressures facing ACA insurers nationwide. A key factor is the scheduled expiration of enhanced premium tax credits at the end of 2024.
These enhanced subsidies, enacted during the Biden administration, made coverage more affordable for millions of Americans and led to record enrollment numbers. According to the policy nonprofit KFF, their expiration could cause premiums to be significantly higher than they otherwise would be.
"This decision was not made lightly and is driven by the need to maintain sustainable operations amid rapidly shifting dynamics across the industry," the company's statement explained.
Experts believe the potential end of these subsidies is a major contributor to insurers' strategic decisions. Dan Sacks, an associate professor at the University of Wisconsin-Madison School of Business, explained that subsidies make it possible for healthier individuals, who might otherwise forgo insurance due to cost, to remain in the market.
Without the subsidies, healthier people may drop their plans, leaving a smaller and more expensive pool of insured individuals with chronic conditions. "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."
National Premium Hikes Expected
According to an analysis by KFF, ACA marketplace insurers across the country are planning to increase premiums by an average of about 20 percent next year. This is attributed to rising healthcare costs and the anticipated end of the enhanced tax credits.
A Growing Trend Among Insurers
Common Ground is not the only insurer in Wisconsin adjusting its ACA marketplace presence. Chorus Community Health Plans also announced it will exit the state's ACA marketplace entirely by 2026. This move is expected to affect approximately 11,000 members across 15 counties.
Chorus cited a "multi-year declining financial performance" as the reason for its departure. State regulatory reports show the company's ACA business line incurred an underwriting loss of $2.9 million in 2022, which grew to a loss of $8.5 million in 2023.
This pattern extends beyond Wisconsin. Nationally, major players are also pulling back. CVS Health’s Aetna announced it will stop offering individual and family plans on the ACA exchange after 2025, citing significant financial losses in that sector.
The Role of Federal Policy
The instability in the insurance market has drawn the attention of policymakers. Wisconsin Governor Tony Evers recently joined a coalition of 17 governors in a letter to Congress, urging lawmakers to extend the enhanced subsidies.
"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," Governor Evers stated.
Professor Sacks noted that the history of the ACA marketplace shows a direct correlation between federal support and insurer participation. Insurers entered the market when initial subsidies were strong in 2014 and 2015, and many exited when those supports were reduced.
"When the enhanced premium tax credits came in, we saw a lot more entry of insurers," Sacks observed. "So it would not surprise me if a lot of insurers exit when these subsidies go away." For the 24,000 Wisconsin residents affected by Common Ground's decision, the immediate future involves navigating the open enrollment process to secure new coverage for 2025.
