A copy of that document shows the Justice Department asked for data on costs such as the breakup fee; the impact on Aetna’s business strategy, including participation on the Obamacare exchanges; and documents related to a June board meeting and the Humana deal or the exchanges. It may in fact be true that Aetna can’t envision a way to make a profit in the exchanges without merging with Humana, even if it is true that its losses didn’t prevent it from seeing its earnings increase 20% in 2015.
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The company said Monday that it lost $430 million since January 2014, when Kentucky and many other states started offering plans on their state exchanges. Risk corridors were included in the ACA as a way for profitable insurers to assist unprofitable ones adjust to the new insurance market which now includes guaranteed acceptance and broader required treatment coverage.
The nation’s third-largest insurer has not released specifics on how many clients in Texas use the exchange.
“Our customers expect us to keep their insurance products affordable and continually improving, and our shareholders expect that we will generate a market return on invested capital for them”, the letter stated.
Aetna’s announcement came as the U.S. Justice Department continues its lawsuit to block the company from acquiring Humana, which the government says would violate anti-trust laws.
Aetna said it will reduce its individual public exchange participation from 778 US counties to 242 counties in 2017.
Next year will be Obamacare’s fourth of providing coverage in the new markets.
Pinal County residents will have some off-marketplace options, but those don’t qualify for federal subsidies many receive to help pay their premiums, Briggs said.
“Providing affordable, high-quality health care options to consumers is not possible without a balanced risk pool”, Aetna said in a statement.
Sabrina Corlette, a research professor with the Georgetown Health Policy Institute, said It may still take a few more years for exchange participation to settle and the government may have to change some of the market rules.
Kevin Counihan, the official in charge of Healthcare.gov, said in a statement that the future of the Obamacare marketplace is strong despite Aetna’s exit.
State Insurance Director Ray Farmer said Tuesday he was surprised by Aetna’s withdrawal, as his agency was still reviewing the company’s application for 2017 coverage and rate plans. At the time, the company said it was scrapping plans to expand into new states in 2017.
A GOP-led Congress blocked “risk corridor” money under the Affordable Care Act created to help insurers cover losses, which some called a bailout.
“[We] remain hopeful that we can work with policymakers from both parties on a sustainable public exchange model that meets the needs of the uninsured”, he said.
Aetna is exiting Arizona, Florida, Georgia, Illinois, Kentucky, Missouri, North Carolina, Ohio, Pennsylvania, South Carolina, and Texas, but will keep selling plans in Iowa, Delaware, Nebraska and Virginia.
Subsidized coverage – offered to people earning up to 400 percent of the federal poverty level (about $47,000 for an individual or $97,000 for a family of four) – is available only via the public exchanges.
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Added Villalobos, “You’re going to see about 10,000 people who do not have access to care”.
