Aetna is reducing its Obamacare footprint, joining other major insurers in withdrawing from Affordable Care Act exchanges amid concerns about the viability of the health insurance coverage marketplaces.
For the 2017 plan year, the nation’s third-largest insurer said Tuesday, it will only sell plans on exchanges in four states, down from this year’s 15, affecting 20% of Aetna’s 838,000 Obamacare participants in 536 counties.
Aetna cited its second-quarter pretax loss of $200 million and total pretax losses of more than $430 million since January 2014 in its individual insurance products, while also drawing attention to what it sees as shortcomings of the ACA.
“Providing affordable, high-quality health care options to consumers is not possible without a balanced risk pool,” CEO Mark Bertolini said in a news release. “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,” he added.
Aetna is following the lead of UnitedHealth and Humana, which have announced their own exchange pullbacks for 2017. The move “raises further questions about the long-term viability of the ACA marketplaces,” Susquehanna analyst Chris Rigg told MarketWatch.
The Los Angeles Times noted that declining exchange participation from insurers “is becoming a concern, especially in some rural markets, because competition is supposed to help control insurance price increases, and many carriers have already announced plans to seek price hikes of around 10% or more for 2017.”
But Kevin Counihan, a Department of Health and Human Services official who oversees the federal marketplace, said Aetna’s decision “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.”
Only Aetna’s Obamacare members in Delaware, Iowa, Nebraska and Virginia will be unaffected by the pullback, with Arizona, Florida, Georgia, Illinois, Kentucky, Missouri, North Carolina, Ohio, Pennsylvania, South Carolina and Texas all losing exchange coverage.