Aetna is reducing its Obamacare footprint, joining other major insurers in withdrawing from Affordable Care Act exchanges amid concerns about the viability of the health insurance coverage marketplaces.
Advertisement
This comes just a couple of months after UnitedHealthcare also chose to pull out of Georgia, among many other states.
In a statement, Aetna CEO Mark Bertolini says the company is losing too much money on the exchanges created under the Affordable Care Act, or Obamacare.
In other words, if the deal with Humana dies on the vine, so does all of Aetna’s public-exchange business.
In a July 5 letter to the Justice Department, reviewed by The Wall Street Journal, Aetna said that if the Humana deal drew a legal challenge, “instead of expanding to 20 states next year, we would reduce our presence to no more than 10 states”.
“We see these decisions as an opportunity for CareSource to offer a safety net of quality health care coverage options for the thousands of consumers impacted”, said Steve Ringel, president of the OH market for CareSource.
Arizona is just one of the 11 states Aetna will no longer cover through Obamacare; the company’s subsidized plans will now only be available in four states.
The moves by Aetna and UnitedHealthcare follow decisions a year ago by Assurant Health to exit the health insurance market altogether and by Consumers’ Choice to fold.
Aetna had filed and received state approval to sell plans for 2017 in Boone, Campbell, Kenton, Fayette, Madison, Jefferson, Oldham, Trimble, Henry and Owen counties.
Aetna, the third largest insurance company in the USA says the market’s financials are unworkable, pointing out that it has lost more than $430 million since January 2014 on its individual products.
Aetna Inc. warned antitrust officials more than a month ago that it would pull out of Obamacare’s government-run markets for health insurance if the United States tried to block its $37 billion merger with Humana Inc.
“If they’re now receiving government subsidies that may not continue with an off-exchange product”, said Aetna spokesman Rohan Hutchings.
“If we were to build out 15 markets, it would cost us somewhere between $600 million to $750 million to enter those markets and build out the capabilities necessary to grow that membership”, he said on the company’s April earnings conference call with analysts.
Advertisement
Aetna wouldn’t be the only insurer to link its exchange position to a hoped-for deal.
