State Insurance Director Ray Farmer said Tuesday he was surprised by Aetna’s withdrawal, as his agency was still reviewing the company’s application for 2017 coverage and rate plans. Aetna’s decision doesn’t affect people covered by the company this year, but when they look for coverage next year, they’ll need to pick a new insurer.
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Aetna’s announcement “was the latest sign that large insurers are losing money in the Affordable Care Act’s marketplaces, heightening concerns about the long-term stability of a key part of Obama’s domestic policy legacy”, reported the Post.
When this act started, many uninsured people with illnesses flooded the market. Anthem operates for-profit Blue Cross plans in 14 states and said it can’t expand to other states unless the merger with Cigna goes goes through, The New York Times reports. Cox said the total may be closer to one in four now. Under state law, insurance companies must give consumers at least 90 days notice before discontinuing a plan in the individual market.
Alabama, Alaska and Oklahoma are among the states that will have one health insurer selling individual coverage on their exchanges next year. North Carolina, for instance, has 100 counties, many of them rural.
The Kaiser Family Foundation predicts that, for people in one in five US counties, the offerings on the exchanges will be down to one insurer by next year.
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. Why would UnitedHealth, the nation’s largest insurer, participate in a program that expects nearly $1 billion in losses between this year and last? We now plan, as part of our strategy following the acquisition, to expand from 15 states in 2016 to 20 states in 2017.
In Aetna’s case, the company claimed that it was inundated by higher-than-anticipated costs, particularly due to expensive specialty drugs.
The departure leaves Boone, Campbell, Owen and Kenton counties with only two exchange plans.
The shift means Aetna will maintain a presence in only four states: Delaware, Iowa, Nebraska and Virginia. If regulators and plans are not able to come to an agreement to cover that area, then the only option for people buying their own insurance there will be to buy it directly from insurers offering outside of the exchange market. In the past few years, more than a dozen nonprofit insurance co-ops have shut down.
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Aetna’s public explanation on Monday for its pullback focused on the losses it has sustained on its ObamaCare business.
