Aetna Inc., the nation’s No. 3 health insurer, said late Monday it is pulling back from offering offering individual insurance plans on government-run exchanges in 2017 except in Delaware, Iowa, Nebraska and Virginia.
That means no individual exchange plans in some states under the Aetna name or affiliated brands such as Coventry, a spokesman said.
‘As a strong supporter of public exchanges as a means to meet the needs of the uninsured, we regret having to make this decision,’ Aetna chairman and CEO Mark T. Bertolini said in a statement.
He cited pretax losses of $430 million since 2014 on individual plans, saying people signing up are costing more than expected but the government has an ‘inadequate risk-adjustment mechanism.’ A GOP-led Congress blocked ‘risk corridor’ money under the Affordable Care Act designed to help insurers cover losses, which some called a bailout.
‘Providing affordable, high-quality health care options to consumers is not possible without a balanced risk pool,’ Bertolini said.
Read more: How to shop for term life insurance
Aetna said it will reduce its individual public exchange participation from 778 to 242 U.S. counties for 2017.
Federal officials reacted to Aetna’s announcement with a statement from Markeptlace CEO Kevin Counihan:
‘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. It’s no surprise that companies are adapting at different rates to a market where they compete for business on cost and quality rather than by denying coverage to people with preexisting conditions. But the ACA Marketplace is serving more than 11 million people and has helped America reach the lowest uninsured rate on record. With high consumer satisfaction, more people getting care, and an improving risk pool, incoming data continue to show that the future of the Marketplace is strong.’
Until recently, federal officials noted, Aetna emphasized that it found marketplace business worthwhile. Bertolini said in April, for example, that in order to enroll the number of consumers Aetna has on the marketplace, it would expect to spend up to $1.2 billion, so ‘we see this as a good investment.’
Opponents of Obamacare saw it as another indication of the unraveling of the health law.
‘Aetna’s withdrawal from nearly a dozen exchanges is another sign that ObamaCare is unsustainable,’ FreedomWorks CEO Adam Brandon said. ‘Premiums are rising as a result of diminished competition and unbalanced risk pools that have led to a higher than expected utilization of health care. Unfortunately, absent from the national policy discussion are the failures of ObamaCare.’ Read more here.
Read more: Clark’s health insurance guide