The health insurance giant will only offer their products on exchanges in four states
The more than 800,000 Americans who purchase their insurance from one of Aetna’s exchange plans will be out of luck once this year is over. Health insurance giant Aetna announced late Monday evening that they would be scaling back their Obamacare exchange offerings to a paltry four states.
The reason? Losses amounting to more than $430 million.
“Following a thorough business review and in light of a second-quarter pretax loss of $200 million and total pretax losses of more than $430 million since January 2014 in our individual products, we have decided to reduce our individual public exchange presence in 2017, which will limit our financial exposure moving forward. More than 40 payers of various sizes have similarly chosen to stop selling plans in one or more rating areas in the individual public exchanges over the 2015 and 2016 plan years, collectively exiting hundreds of rating areas in more than 30 states. As a strong supporter of public exchanges as a means to meet the needs of the uninsured, we regret having to make this decision,” said Aetna in an official statement.
Like many other large insurers, Aetna claims they can no longer offer an affordable product.
“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.
“The vast majority of payers have experienced continued financial stress within their individual public exchange business due to these forces, which also are reported to have contributed to the failure of 16 out of 23 co-ops. We are encouraged by a recent announcement that the U.S. Department of Health and Human Services will explore new options to modify the risk adjustment program, and remain hopeful that we can work with policymakers from both parties on a sustainable public exchange model that meets the needs of the uninsured.”
Aetna will continue to offer exchange plans in Delaware, Iowa, Nebraska and Virginia.
The story is all too familiar — not enough young, healthy, individuals are purchasing plans from the exchange, leaving insurers with a pool of expensive to cover individuals.
In April, UnitedHealth announced its plans to withdraw from most exchanges.
The failure of the exchanges is not an Obamacare glitch, but a feature. Onward to single-payer!
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