Aetna soured on its ACA business after claims data showed higher use of pricey specialty drugs. The company expects to lose $300 million on the marketplace this year and won't expand its exchange footprint in 2017.
“We believe it is only prudent to reassess our level of participation on the public exchanges,” Aetna CEO Mark Bertolini said during the company's recent investor call. If regulatory changes are not made, “this could get a lot worse,” he warned.
Medicaid insurers Centene Corp. and Molina Healthcare, however, have profited on their ACA plans. Their high-deductible, limited-network plans appeal to healthy people who want the cheapest coverage.
Many other insurers built exchange plans that mirrored employer coverage: higher premiums with a broader selection of hospitals and doctors. That appealed to sicker people who expected to use more medical care and wanted provider choice and fewer out-of-pocket costs, said Craig Garthwaite, a health economist at Northwestern University.
But insurers can adjust, Hempstead said. “It's not like these other carriers don't know how to be a Medicaid (insurer).”
So what will change? Larger premium increases for those big insurers staying in and fewer options. “What I think is working, where it is working, is where we have very tight narrow networks,” Aetna President Karen Lynch said during the earnings call. Several not-for-profit Blue Cross and Blue Shield plans—most recently the Minnesota Blues—have cut popular PPO products in favor of HMO plans.
Other changes likely will come on the regulatory side, and the Obama administration already has implemented some. For instance, at the insurance industry's behest, the CMS made it harder for people to sign up for coverage outside of the annual open enrollment. The CMS also said it will modify the law's risk-adjustment program and limit the use of short-term health plans.