The marketplaces, which operate like insurance exchanges where companies pitch plans in a competitive environment, have also generated losses for UnitedHealth Group, Humana and Blue Cross-Blue Shield insurer Anthem.
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Aetna will notify current policyholders before open enrollment in November that their coverage will be discontinued. That lack of competition puts a major wrench in the way the health care exchanges are supposed to work.
Insurers that have fared better on the exchanges typically offer more restrictive policies. That’s prompting many insurers to raise their rates by double-digit percentages for 2017 or minimize their presence on the market. It will sell coverage on exchanges in 242 counties next year, down from 778.
Some insurers are expanding on the exchanges.
“Without getting into the heads of Aetna’s executives, it’s hard to say whether they were just describing a financial fact that they would have to pull out of the ACA marketplaces if the merger were blocked, or if they were making a thinly veiled threat”, Larry Levitt, a senior vice president at the Kaiser Family Foundation wrote in an e-mail. Aetna said it had lost $430 million since 2014. Last week, it said it will propose modifying the risk adjustment program to absorb some of the cost for claims above a certain threshold, funded by payments from all insurers.
Government officials say the exchanges are improving and healthier people are signing up, which helps insurers balance the claims they get from sicker customers.
“As a strong supporter of public exchanges as a means to meet the needs of the uninsured, we regret having to make this decision”, Bertolini said in a statement announcing the cutbacks. But-off exchange plans can only base premiums on geography, family size, age and tobacco use.
The government subsidizes the plans for more than 80% of consumers who pursue insurance through those exchanges.
“They have been pretty vocal in saying, ‘There need to be changes in the market; we don’t think we can make money here, ‘” Chris Sloan, a senior manager at healthcare consulting firm Avalere Health, tells The Christian Science Monitor.
The federal government has not released detailed insurance-plan information yet, making it hard to accurately gauge whether any other USA counties may face a similar challenge. Cigna plans to sell ACA policies in Raleigh.
In all, about 11 million people have bought insurance through the exchanges.
The 2016 tax year is the first year people who do not have health insurance have to pay the full amount in penalties. “Although we remain supportive of the Administration’s efforts to expand coverage, we must also face market realities”. Levitt said people in about a quarter of all counties will only have one option. They have more limited networks of doctors and hospitals and manage their enrollees’ health care usage more tightly. “We probably won’t see the effect the penalty has until 2018”.
Aetna will continue to offer exchange plans in Delaware, Iowa, Nebraska and Virginia.
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Researchers had already predicted that number would fall this year, as companies figured out how to deal with rising medical costs in many markets.
