Aetna’s exit announcement Monday that blamed financial losses on its marketplace plans gave Obamacare opponents who have from the start predicted the health law’s failure a fresh chance to proclaim, “I told you so”. “We need to ask: Is a health care system with insurance companies at the center viable for ensuring our care?”
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Republican lawmakers say the news confirms that Obamacare is not working, others see Aetna’s withdrawal as a sign of growing pains.
The nation’s third-largest insurer said that a second-quarter pre-tax loss of $200 million from its individual insurance coverage helped it decide to limit exposure to the exchanges, which also have generated losses for UnitedHealth Group and Anthem, among other carriers.
Experts say it is too soon to determine how shrinking insurer participation will affect rates beyond next year, but fewer choices generally contribute to higher prices over time.
“Specifically, if the DOJ sues to enjoin the transaction, we will immediately take action to reduce our 2017 exchange footprint”, Aetna CEO Mark T. Bertolini said in his July 5 letter, which was obtained by The Huffington Post and first reported by the outlet Wednesday.
“It is not surprising given the losses that many companies have had in many states over the past three years”, Ritchie said. The Long Beach, Calif., insurer sells coverage on exchanges in nine states and was considering adding two more for next year.
The back-and-forth with US antitrust officials that culminated in Aetna’s retreat is the latest turn in the volatile state of Obamacare’s “exchange” markets.
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Aetna, which has said it expects to lose more than $300 million on exchanges this year, is not alone. The company move would take it out of 546 counties in 11 states, leaving it active in 242 counties in four states: Delaware, Iowa, Nebraska and Virginia. Insurers have struggled to enroll enough healthy people to balance the claims they pay from high-cost customers, and they have complained about steep shortfalls in support from government programs created to help them. The report said insurers likely underpriced their premiums in 2014, due to a lack of information and desire to win market share, and then didn’t make up the ground adequately in pricing for 2015-leading to losses. But it only plans to offer policies in three states next year, Nevada, Virginia and NY. “Regardless, we remain confident that the majority of Marketplace consumers will have multiple choices and will be able to select a plan for less than $75 per month when Open Enrollment begins November 1st”. “Providing affordable, high-quality health care options to consumers is not possible without a balanced risk pool”.
