Aetna CEO Mark Bertolini said in a statement that the company is withdrawing its plans to expand offerings in state exchanges next year and that it would reconsider selling plans in the 15 states where it now participates in exchanges.
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The company said it expected premiums of $750 million-$1 billion in 2017 from its Obamacare plans, way lower than the $3.4 billion estimated for 2016.
She said many health care providers have expressed significant concern about consolidation of large health insurers.
Kentuckians who purchased Aetna health insurance plans via the state exchange in 10 Kentucky counties may face more limited options when open enrollment starts November 1.
U.S. Department of Health and Human Services spokeswoman Marjorie Connolly said the exchanges would continue to thrive as insurers compete for consumers’ business.
The company said it would shrink the business to 11 states next year and had already limited memberships in the four states where it no longer meant to offer the plans.
Health care costs in the United States are plaguing both consumers and providers alike with the latest illustration of the trend coming from Aetna on Tuesday.
The states that have joined the Department of Justice’s challenge against Anthem acquiring Cigna include California, Colorado, Connecticut, Georgia, Iowa, Maine, Maryland, New Hampshire, New York, Tennessee, Virginia and the District of Columbia.
A number of health insurance companies have voiced their issues with the Obamacare exchanges and how viable the program was as they endured huge losses.
Aetna had earlier made regulatory filings indicating it was considering expanding into five new state exchanges in 2017. Many claim the premiums are excessively low and didn’t cover the care consumers had because they were much sicker than many thought. Aetna and Anthem asked for hearings to be held in the fall while the government has asked for next year.
The company’s reassessment of Obamacare follows an April announcement by UnitedHealth Group Inc that it would largely exit the individual insurance market in 2017 and as other large insurers, including Humana and Anthem Inc., are expressing concern about the losses they are incurring from it.
When the proposed Anthem-Cigna and Aetna-Humana deals were announced previous year, I wrote about a study those companies undoubtedly hoped would go unnoticed.
But Humana exceeded analysts’ expectations with adjusted earnings – which exclude things like the $61 million Humana has spent so far this year on its merger with Aetna – of $2.30 per share, according to Reuters. (HUM) announced that they have entered into separate agreements to sell certain of their respective Medicare Advantage assets to Molina Healthcare, Inc.
Net income rose 8 percent to $790.8 million, or $2.23 per share.
Aetna posted revenue of $15.9 billion in the period, also exceeding Street forecasts.
Aetna plans to sell its Louisiana Medicare Advantage plan to Molina Healthcare Inc.as part of Aetna’s proposed acquisition of Humana.
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Humana shares have decreased 5 percent since the beginning of the year, while the Standard & Poor’s 500 index has climbed 5.5 percent.
