Aetna said that it had a second-quarter pretax loss of $200 million on the individual business and has lost $430 million since the plans first went on sale in 2014.
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Aetna’s decision follows similar moves from UnitedHealth Group Inc. and Humana Inc., which have cited similar concerns about financial losses on these exchanges created under President Barack Obama’s national healthcare reform law. “Providing affordable, high-quality health care options to consumers is not possible without a balanced risk pool”. More than 40 payers of various sizes have similarly chosen to stop selling plans in one or more rating areas in the individual public exchanges over the 2015 and 2016 plan years, collectively exiting hundreds of rating areas in more than 30 states. It said it expects to lose $650 million this year on its exchange business, up from its previous projection for $525 million.
Aetna regrets “having to make this decision” because it supports public exchanges to meet insure the uninsured, he said. Aetna has said its revised stance on the ACA wasn’t prompted by the suit.
Aetna will reduce the number of counties where it sells exchange plans next year to 242 from 778, a dramatic turn that came a few weeks after the insurer said it expected steep losses for the year and would reconsider its participation in the market, which it had previously called an important opportunity.
Many insurers a year ago had said they expected to profit on the exchanges, but now say more exchange rules must be changed for it to be sustainable.
It will exit markets including North Carolina, Pennsylvania, Florida and OH, and keep selling plans in Iowa, Delaware, Nebraska and Virginia.
The company said that it will scale back from participating in 15 states this year to just four states in 2017.
Aetna held open the possibility it will expand if “meaningful exchange-related policy improvements” are made.
Kevin Counihan, who oversees the ACA marketplaces at the federal Centers for Medicare and Medicaid Services, said in a statement that the health care markets remain strong.
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Aetna’s about-face on the ACA, also known as Obamacare, comes less than a month after the U.S. Justice Department sued to block the company’s $37 billion purchase of Humana.
