Citing heavy losses tied to its low-priced insurance plans, one of the larger health insurers in the United States – Aetna Group – has announced that, beginning in 2017, it will no longer participate in the Affordable Care Act (ACA) health care program also known as Obamacare in 11 of 15 states – 242 of 778 counties nationwide.
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The nation’s third largest insurer says it plans to leave almost 70 percent of the counties in which it now sells coverage as it trims exchange participation to four states in 2017, down from 15 this year.
Aetna sustained a second-quarter pre-tax loss of $200 million on its individual health care plans, though that figure includes results from insurance offered outside of the Obamacare exchanges.
The health insurance giant now offers Affordable Care Act exchange plans in 15 states.
“Providing affordable, high-quality health care options to consumers is not possible without a balanced risk pool”, Bertolini said, before noting that the company saw a recent spike of “individuals in need of high-cost care”.
In a letter obtained by The Huffington Post thorough a Freedom of Information Act request, Aetna CEO Mark Bertolini tells the Justice Department that how regulators treat the Aetna-Humana deal will have implications for the struggling exchanges.
The company said Monday that it lost $430 million since January 2014, when Kentucky and many other states started offering plans on their state exchanges.
ObamaCare relies on privately run insurers to offer health plans that individuals can buy, often with government subsidies.
Aetna’s move follows similar moves by competitors such as UnitedHealth Group, the nation’s largest insurer.
The other route is the public option that President Barack Obama proposed in his campaign for health care reform.
In another blow to Obamacare, Aetna has announced it will cut plans in 11 states next year.
Aetna plans to continue participating in exchanges in Iowa, Nebraska, Delaware and Virgina, while leaving IL and 10 other states.
Republicans, meanwhile, said Aetna’s withdrawal from the exchanges is further proof of the failure of the ACA.
Aetna’s CEO says the company may consider returning to the exchanges if improvements are made to the program. Coverage for those people will not change this year. “But I don’t think the marketplaces are crashing and burning by any means”, she said. While millions of Americans have signed up for coverage, the companies say they haven’t been able to enroll enough young and healthy people to offset the high cost of covering sick people. The Long Beach, California, insurer sells coverage on exchanges in nine states and was considering adding two more for next year.
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Federal research shows people on the exchanges tend to choose plans based on how little they can pay in monthly premiums.
