The company is just the latest marketplace carrier to announce plans for a pullback next year, shaking up the list of companies offering plans through the health insurance marketplaces as they enter their fourth year of open enrollment.
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Aetna will become the latest health insurer to chop participation in the Affordable Care Act’s public exchanges when it trims its presence to four states for 2017, from 15 this year. Obamacare critics see this as a sign that the end of the health reform law is near.
Citing increased medical costs, NY recently authorized insurers offering individual ObamaCare plans to increase premiums by an average 16.6 percent – the highest rate hike in the program’s four-year existence.
After reporting a loss for the second quarter of the year, the company announced that it had stopped its 2017 ACA expansion plans and was now evaluating its existing footprint in 15 states.
Next year, Aetna will sell individual marketplace plans only in Delaware, Iowa, Nebraska and Virginia but none in Florida under the Aetna name or affiliated brands such as Coventry, a spokesman said.
Aetna’s decision was seemingly spurned by the continuing financial losses incurred by participating in the program, which totalled $430 million in individual products since the program formally began in January 2014, according to Mark T. Bertolini, the chairman and chief executive of Aetna. It follows in the footsteps of UnitedHealth Group and Humana, which also announced plans to cut back their participation in the exchanges. The companies will be able to adjust the premiums in the future.
In all, about 11 million people have bought insurance through the exchanges.
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.
Aetna is not withdrawing from all the health care exchanges, but the reduction is dramatic nonetheless.
Anthem linked its merger with its participation in Obamacare. “Hillary Clinton outlined concrete plans to make health coverage more affordable in and out of the marketplaces, with more choices, expanded relief for costs, aggressively containing prescription-drug expenses, and the choice of a public option”, said Jesse Ferguson at the Clinton campaign.
“Any loss [of an insurer] is a blow to competition, ” said Bill Custer, a health insurance expert at Georgia State University. If that trend continues, insurers should be able to set premiums that better reflect the actual costs of covering people under Obamacare.
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Timothy Jost, a professor emeritus at Washington and Lee University School of Law, told CNN Money the biggest problem to overcome is the highly flawed and underfunded “risk mitigation efforts” that are essential to keeping many insurers in the Obamacare game. If insurance sign-ups increase, then deeper concerns about Obamacare will fade.
