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Rebecca Zisser / Axios

The recent report from Standard & Poor's detailing why Obamacare is not in a death spiral has made a lot of waves, especially in liberal circles. Don't overlook the linchpin of the S&P analysis — the financial reports of the not-for-profit and mutual Blue Cross Blue Shield insurers.

Why focus on the Blues? Simply put, they hold a lot of market power, and the exchanges would struggle to function without them. "Traditionally the Blues have been the main players in the individual market," Dan Polsky, the executive director at the University of Pennsylvania's Leonard Davis Institute of Health Economics, told me. "They are kind of the default, the last man standing."

Here's the evidence of the Blues' importance:

  • Five states (Alabama, Alaska, Oklahoma, South Carolina, Wyoming) had only one insurer for 2017. In each of those instances, the lone insurer is a Blue Cross Blue Shield affiliate.
  • Many other states (Arizona, Delaware, New Jersey, North Carolina, Vermont, West Virginia) had only two insurers for 2017. In each of those instances, the Blues are a dominant player.
  • Blues are major competitors in California, Florida and other big-state exchanges.

It's not all rosy for the Blues: The Obamacare markets vary widely from state and depend heavily on other factors, such as Medicaid expansion, whether pre-Obamacare plans are still around, and the state's risk pool.

  • Many Blue Cross Blue Shield plans still offer broader networks of hospitals and doctors. But the Blues in Illinois, Minnesota and Texas scrapped those plans in favor of narrow networks.
  • The Blues affiliates in Mississippi and Nebraska only sell plans off the exchange, and Wellmark just decided to abandon its half-hearted attempt on the Iowa exchange.

What we're watching: Anthem, the largest of all the Blue Cross Blue Shield companies. The for-profit Anthem has a massive Obamacare business that has hovered around break-even and slight profitability, and its decision to stay or exit in 2018 will be a bellwether for the marketplaces.

"They're kind of caught between theses two different psychologies of how one might embrace the marketplace," Polsky said, noting Anthem will either choose its shareholders or its legacy mission of covering those in need. "It's very unpredictable."

Go deeper

2 hours ago - Politics & Policy

Scoop: Kaine, Collins pitch Senate colleagues on censuring Trump

Sen. Tim Kaine speaks with Sen. Susan Collins. Photo: Andrew Harnik/AP via Getty Images

Sens. Tim Kaine and Susan Collins are privately pitching their colleagues on a bipartisan resolution censuring former President Trump, three sources familiar with the discussions tell Axios.

Why it matters: Senators are looking for a way to condemn Trump on the record as it becomes increasingly unlikely Democrats will obtain the 17 Republican votes needed to gain a conviction in his second impeachment.

3 hours ago - Politics & Policy

Scoop: Anthony Coley to lead Justice Department public affairs

Photo: Xinhua/Ting Shen via Getty Images

Judge Merrick Garland, President Biden’s nominee for attorney general, has tapped Anthony Coley, an Obama-era Treasury Department official, to serve as a senior adviser and to lead public affairs at the Department of Justice, according to people familiar with the matter.

Why it matters: As the public face of the DOJ, Coley will help explain — and defend — the department's actions, from sensitive cases to prosecutorial decisions, including the investigation into Hunter Biden.

AP: Justice Dept. rescinds "zero tolerance" policy

A young girl waves to onlookers through the fence at the U.S.-Mexico border wall in San Ysidro, California, in Nov. 2018. Photo: Sandy Huffaker/AFP via Getty Images

President Biden's acting Attorney General Monty Wilkinson issued a memo on Tuesday to revoke the Trump administration's "zero tolerance" immigration policy, which separated thousands of migrant children from their families at the U.S.-Mexico border, AP first reported.

Driving the news: A recent report by Justice Department Inspector General Michael Horowitz emphasized the internal chaos at the agency over the implementation of the policy, which resulted in 545 parents separated from their children as of October 2020.

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