Last November, when UnitedHealth Group said it expected to post big losses on its Obamacare policies in 2016, rivals such as Anthem and Aetna signaled their Affordable Care Act businesses were doing fine.
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Aetna, the nation’s third-largest insurer, announced plans late Monday to leave almost 70 percent of the counties nationwide where it now sells Affordable Care Act policies, saying it’s been swamped with higher than expected costs. He says pretax losses in the second quarter of this year hit $200 million, while total pretax losses since January 2014 reached $430 million in the company’s individual insurance products.
UnitedHealth Group, the nation’s biggest health insurer, announced in April it will cut its participation in public health insurance exchanges to a few states next year after expanding to almost three dozen for this year.
Nationwide, the company says it will shrink its presence from 778 counties to 242 next year, and will continue operating exchange plans in only four states: Nebraska, Virginia, Iowa and Vermont.
When the exchanges open for business on November 1, many consumers will face fewer options and higher prices.
This week, Aetna Inc. said it will withdraw from 11 of the 15 states where it now offers plans, the latest major national insurer to sharply pull back its participation.
Aetna hasn’t ruled out a future expansion on the exchanges “should there be meaningful exchange-related policy improvements”, Chairman and CEO Mark Bertolini said in a statement. With Aetna’s exit, one county in Arizona now has no insurer offering coverage through the ACA for next year.
Professor Bill Custer, an insurance expert at Georgia State University, says more Georgians are likely to switch their plans during this open enrollment season because their options have been reduced.
Insurers say there aren’t enough healthy people who have enrolled in the exchanges to cover the cost of the sick.
Some insurers are expanding on the exchanges. 55% of individual on-exchange memberships are new in 2016, and the company saw individuals who needed high-cost care taking up a larger portion of their on-exchange population. Under the law, the government won’t let insurers deny claims based on pre-existing conditions, and demands they spend a certain amount on care versus administration, while Americans are required to purchase some kind of health insurance and can obtain subsidies for it on the exchanges. Centene and Molina Healthcare have been able to turn a profit on the exchanges by offering Medicaid-like health plans.
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Aetna’s pullback leaves Pinal County outside Phoenix with no insurers selling individual coverage for next year on the exchange, although some will sell coverage off the exchange, according to Arizona’s insurance department. But it decided instead to add counties in states where they already have a presence.
