The cancellation of Roe will not cause major disruption for insurance companies such as Blue Cross, the parent company of HCSC.
However, dealing with various state laws is nothing new for insurance companies. The laws governing health, home, life, and auto insurance vary widely. If Roe v. Wade is dismissed, additional abortion laws will be another thing health insurance companies should keep an eye on, but experts say the consequences likely won’t be a drastic disruption to operations or profits.
“There’s already a lot of work that insurance companies need to do in every state,” says Lee Hasselbacher, senior fellow at the university’s Center for Interdisciplinary Research and Innovation in Sexual and Reproductive Health. Chicago.
Health Care Service Corp. from Chicago operates Blue Cross and Blue Shield plans in Illinois, Montana, New Mexico, Oklahoma and Texas. Illinois is the largest HCSC plan with nearly 9 million members. It is followed by Texas with 6.8 million members, while the rest of the states have less than 1 million. With over $50 billion in 2021 revenue, HCSC employs about 24,000 people across five states.
According to the Guttmacher Institute, a research group on abortion rights, Illinois is one of six states that currently require private insurance companies to cover abortions. But in other HCSC BCBS plans, restrictions on abortion coverage are more common. Neither Montana, Oklahoma, nor Texas require private insurance companies to pay for abortion services. Instead, each limits the circumstances in which an abortion can be covered, according to the Guttmacher Institute.
If Roe v. Wade is dropped, experts expect a new wave of restrictions in those states, but they doubt compliance with the new abortion rules will be too costly or burdensome for insurers. Abortion represents a relatively small amount of business for most health insurance companies.
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“They won’t be particularly difficult to navigate,” says Amanda Stark, an associate professor at Northwestern University’s Kellogg School of Management who studies insurance markets. “I would be shocked if this had a significant impact on the overall cost of the plan.”
Stark notes that any new coverage limits will not apply to plans HCSC administers for large employers that fund employees’ own health insurance. Employer-funded plans are governed by federal law and are exempt from state regulation, she said.
In a statement, HCSC declined to discuss the potential impact of the new abortion restrictions on its business. “The draft Supreme Court decision that has been leaked to the news (media) in Roe v. Wade is not final and we would not like to speculate on the final decision. Once the decision is announced, we will evaluate the implications and impact on our customers/participants.”
UnitedHealthcare, based in suburban Minneapolis but the No. 2 insurer in Illinois after BCBS of IL, offers insurance plans across the US and is likely to face the same challenges as HCSC in navigating new abortion-related restrictions. . UnitedHealthcare did not respond to a request for comment.
While the new rules could create more work for insurance companies in the near future, the long-term impact is likely to be minimal, Stark says, adding that it’s unlikely that private insurers will consider exiting certain states.
“There are definitely regulatory reasons you could imagine exiting the market, but this is not one of them,” says Stark. “This should drastically affect the overall profitability of the firm, and I think this is unlikely.”
John Asplund of Crain contributed.
This story first appeared in our sister publication, Crane’s Chicago business.