AET Aetna Inc. (delisted)

Blue Cross Blue Shield of Arizona will offer plans on the Affordable Care Act exchange in Arizona's Pinal County next year, resolving a situation that drew a national spotlight because it represented a major challenge to the mechanics of the health law.

When Aetna Inc. announced last month that it would withdraw from the exchange in Arizona, among other states, it left Pinal at risk of becoming the first U.S. county without a single insurer selling exchange plans. Aetna had been expected to sell exchange plans in Pinal County, where approximately 10,000 people had signed up for ACA plans.

That circumstance could present a significant problem because of how the law works. The ACA mandates that most people acquire health coverage, and offers subsidies to help lower-income consumers purchase plans. To obtain the subsidies, though, people are supposed to purchase their plans through ACA exchanges.

Blue Cross Blue Shield of Arizona Chief Executive Rich Boals said in a statement that his company will be the sole exchange insurer in 13 of Arizona's 15 counties in 2017. However, he said, "regulators and policy makers must find a way to stabilize the market and put long-term fixes in place. Meanwhile, BCBSAZ is trying hard to balance the company's financial losses from the ACA with the very real concerns of Arizonans."

The insurer's agreement represents a victory for federal and state officials, who have been pushing to resolve the situation in the weeks since it emerged. But the broader issue of thin offerings in many states' exchanges, in the wake of withdrawals by major insurers that suffered financial losses on the business, will continue to challenge regulators.

Insurance officials in other states remain nervous about the possibility that other counties might lose all their exchange insurers if other companies decide in coming weeks to reduce their footprints. "This is just too close to the margin," Wayne Goodwin, North Carolina's insurance commissioner, said in an interview last month. "Even if we do maintain one carrier for the exchange offerings in North Carolina, that is too close." North Carolina is expected to have just one insurer in most of its counties.

A study by the Kaiser Family Foundation suggests there could be just one exchange insurer in 31% of counties in 2017, and there might be only two in another 31%. States including Alabama, Alaska, Missouri, Arizona, Florida, Mississippi, Oklahoma and Tennessee are likely to go next year to having one insurer in all or most counties, Kaiser's analysis found.

Blue Cross Blue Shield of Arizona in June had announced that it would next year pull its exchange plans in two counties of Arizona, Pinal and neighboring Maricopa, which is where Phoenix is located. The insurer said at the time that it would keep selling exchange plans in more-rural parts of the state, but it had to "strike a balance between how we serve the market and the losses these plans incurred." The insurer said then it lost $185 million on individual ACA plans in two years.

Neighboring Maricopa County is also now expected to have just one insurer, Cigna Corp., after Tenet Healthcare Corp.'s Phoenix Health Plans recently announced that it will withdraw from the exchange in the county. Phoenix Health Plans said in a statement that it had decided to discontinue the exchange plans "based on the economic challenges and underlying risks of the products." That would represent a sharp drop-off for Maricopa, which has had a large selection of exchange insurers.

Corrections & Amplifications: There are 15 counties in Arizona. An earlier version of this article incorrectly stated that there are 14. (Sept. 7, 2016)

Write to Anna Wilde Mathews at anna.mathews@wsj.com

(END) Dow Jones Newswires

September 08, 2016 01:25 ET (05:25 GMT)

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