Aetna bails on ACA exchanges
National health insurer Aetna said Wednesday that it has exited all the Affordable Care Act's insurance exchanges for 2018.
The Hartford, Conn.-based insurer will stop selling individual insurance plans on and off the exchanges in Nebraska and Delaware next year. Aetna, which is selling exchange plans in four states in 2017, previously said it would pull out of the exchanges in Iowa and Virginia.
The company blamed financial losses for its retreat, saying it expects to lose $200 million on individual plans this year. It insures just 255,000 members in the individual market. The insurer said it lost $450 million in 2016, when it insured 964,000 individual ACA members. Aetna's total 2016 revenue totaled $60.2 billion, while its profit was $2.3 billion.
"Those losses are the result of marketplace structural issues that have led to co-op failures and carrier exits, and subsequent risk pool deterioration," the company said in a statement.
Aetna's wholesale exit, though hardly surprising, deals another blow to the health insurance exchanges, where 12.2 million Americans get healthcare coverage.
Insurers have been threatening to quit the exchanges for months because they don't have the necessary details needed to price 2018 plans. The Trump administration hasn't said definitively if it will continue to fund cost-sharing reduction payments in 2018 and enforce the individual mandate that requires most people to enroll in coverage or face a financial penalty.
Some insurers have filed sky-high rate requests for their 2018 marketplace plans, citing uncertainty over the future regulations in the individual market. Experts say the rate hikes are warning sign that actions must be taken to stabilize the individual market.
Aetna had already sharply reduced its exchange presence in 2017 when it pulled out of 11 states, again citing big financial losses. Some believe Aetna had other motives. A federal judge in January concluded the insurer pulled out of some exchanges to improve the chances of closing its merger with Humana, and that it wasn't a business decision. That proposed merger ultimately fell apart.
But its exit will be felt significantly in some states. With Aetna's departure, Nebraska and Delaware are both left with a sole insurer, said Cynthia Cox, associate director for health reform at the Kaiser Family Foundation. Iowa is also left with a single insurer, Medica, because of Aetna's planned exit. And Medica said last week that it may exit, leaving the Iowa marketplace with no insurance options.
Aetna was reportedly expected to enter the exchange in Nevada, because it won a Medicaid managed-care contract in the state. Nevada entices insurers to participate in its exchange by giving the insurers that sign up preferential treatment when bidding for lucrative Medicaid managed-care contracts.
But T.J. Crawford, spokesman for Aetna, declined to comment on the insurer's "potential Nevada presence."
Not all health insurers are losing money on the insurance exchanges. For many, exchange business—though rocky in the first few years— is finally getting better. Anthem CEO Joseph Swedish told investors in April that its individual market claims were lower in 2017. The company said earlier this year that it expected to break even.
Molina Healthcare also said its exchange business is improving. And Blue Cross and Blue Shield of Tennessee on Tuesday said that it plans to enter a new exchange market next year. It said claims are lower and rates are becoming more stable.
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