On Tuesday, Aetna said it would dramatically scale back its participation on the insurance exchanges in 2017.
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Aetna, which earlier this year said it was too soon to give up on the exchanges despite its challenges, this month signaled it was reconsidering.
The company, which has approximately 31,000 individual policyholders in Pennsylvania, said it has lost $430 million by selling health plans through the insurance exchanges created under the Affordable Care Act.
Now, We could be looking at about one in four counties in the USA with just one exchange insurer next year, though this could change between now and open enrollment in November, said Cynthia Cox, associate director for the Kaiser Family Foundation Program for the Study of Health Reform and Private Insurance. Aetna, the managed healthcare giant, announced it will join more than 40 other insurers in abandoning Obamacare.
The announcement follows UnitedHealthcare’s departure from the IL exchange. They already were the only companies offering plans statewide.
Still, health experts worry that with less competition, insurers may tighten their provider networks and give these consumers fewer choices of hospitals and doctors.
Aetna will still offer individual plans outside the marketplace.
On the surface, the reason for Aetna’s decision isn’t hard to understand.
Aetna said it will reduce its individual public exchange participation from 778 to 242 USA counties for 2017. But so far, only about 11 million have enrolled in health plans through the marketplaces, despite the threat of federal tax penalties for not having health coverage.
However, with steep shortfalls in support from government programs, insurers say that plans sold on the marketplace – a relatively small slice of their overall operations – are causing significant losses.
Like many other large insurers, Aetna claims they can no longer offer an affordable product. It’s the third major insurer to cut back on federal exchanges, following UnitedHealth Group and Humana.
This year, Aetna sold policies through HealthCare.gov in just 14 of South Carolina’s 46 counties.
The more than 800,000 Americans who purchase their insurance from one of Aetna’s exchange plans will be out of luck once this year is over.
Aetna plans to continue participating in exchanges in Iowa, Nebraska, Delaware and Virgina, while leaving IL and 10 other states. In the past few years, more than a dozen nonprofit insurance co-ops have shut down.
Bertolini said, “We will continue to evaluate our participation in individual public exchanges. and may expand our footprint in the future should there be meaningful exchange-related policy improvements”.
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Bertolini told investor analysts when Aetna released its second-quarter financial results August 2 that the insurer would withdraw expansion plans for Affordable Care Act exchanges in 2017 and that it expected a loss of more than $300 million in Affordable Care Act business this year.
