Another major health insurance company is drastically scaling back its Obamacare participation, citing unsustainable financial losses.
Aetna announced this week that, for the 2017 plan year, it will no longer participate in more than 500 counties after it exits several individual public health care exchanges established under the Affordable Care Act, the federal law better known as Obamacare.
Once Aetna reduces its participation from 778 counties to 242 counties, it will have an on-exchange presence in only four states:
Aetna attributes this decision to “total pretax losses of more than $430 million since January 2014 in our individual products,” citing a growing percentage of exchange enrollees who require costly medical care.
Mark T. Bertolini, Aetna chairman and chief executive, explains:
“Providing affordable, high-quality health care options to consumers is not possible without a balanced risk pool. Fifty-five percent of our individual on-exchange membership is new in 2016, and in the second quarter we saw individuals in need of high-cost care represent an even larger share of our on-exchange population. This population dynamic, coupled with the current inadequate risk adjustment mechanism, results in substantial upward pressure on premiums and creates significant sustainability concerns.”
Bertolini also noted that more than 40 other insurance companies have opted to stop selling plans in certain areas in individual public exchanges over the 2015 and 2016 plan years — “collectively exiting hundreds of rating areas in more than 30 states.”
Those health insurers include the nation’s largest, UnitedHealthcare, which announced this spring that it would exit exchanges in all but a “handful” of states by 2017.
The Associated Press reports, however, that some insurers already have plans to expand their presence on exchanges. Those with plans to branch out in 2017 include Cigna Corp. and Health Care Service Corp.
Kevin Counihan, CEO of the federal exchange operator HealthCare.gov, tells the AP:
“Aetna’s decision to alter its Marketplace participation does not change the fundamental fact that the Health Insurance Marketplace will continue to bring quality coverage to millions of Americans next year and every year after that.”
Open enrollment for the 2017 plan year starts Nov. 1, according to HealthCare.gov.
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