I mentioned last month that the Justice Department sued to block the massive health care mergers between Anthem and Cigna, and another between Aetna and Humana, which would have dropped the number of major health insurance providers in the country from five to just three (the other player being United Health). The mergers would have been a disaster for consumers and competition and in areas of several states would have left Americans facing a monopoly in health insurance coverage.
Now we see Aetna's counterstroke: the insurer is suddenly planning to drop out of Obamacare health exchanges across the country.
Health insurer Aetna Inc. will stop selling individual Obamacare plans next year in 11 of the 15 states where it had been participating in the program, joining other major insurers who’ve pulled out of the government-run markets in the face of mounting losses.
It will exit markets including North Carolina, Pennsylvania and Florida, and keep selling plans in Iowa, Delaware, Nebraska and Virginia, Aetna said in a statement Monday. In most areas it’s exiting, Aetna will offer individual coverage outside of the program’s exchanges.
The decision by Aetna is the latest blow to President Barack Obama’s signature domestic policy law. While it has brought coverage to millions, the new markets have proven volatile for some of the largest for-profit insurers, and UnitedHealth Group Inc. and Humana Inc. are also pulling out, after posting hundreds of millions of dollars of their own losses. Aetna said earlier this year that it expects to lose $300 million on the plans.
Next year will be the law’s fourth of providing coverage under the new markets. Aetna’s decision doesn’t affect people covered by the company this year, but when they look for 2017 coverage, they’ll need to pick a new insurer. The decision raises the prospect that some consumers will only have one insurer to choose from when they buy 2017 coverage.
Aetna’s about-face on the ACA comes less than a month after the U.S. Justice Department sued to block the company’s $37 billion purchase of Humana. The DOJ says the combination would harm competition for private Medicare plans and for ACA health plans. Aetna has said its revised stance on the ACA wasn’t prompted by the suit.
“The vast majority of payers have experienced continued financial stress within their individual public exchange business,” Aetna Chief Executive Officer Mark Bertolini said in the statement. “Providing affordable, high-quality health care options to consumers is not possible without a balanced risk pool.”
Sure, the DoJ lawsuit had nothing to do with Aetna's decision to pull out. And if you believe that, I've got some insurance to sell you. After all, the Bloomberg article does note that this is an about face for the company, because just three months ago, Aetna was salivating over stepping in to pick up new Obamacare customers and even wanting to expand its markets.
Health Insurer Aetna Inc on Wednesday said it plans to continue its Obamacare health insurance business next year in the 15 states where it now participates, and may expand to a few additional states.
"We have submitted rates in all 15 states where we are participating and have no plans at this point to withdraw from any of them," said company spokesman Walt Cherniak. But he noted that a final determination would hinge on binding agreements being signed with the states in September.
Again, this was May and Aetna was full steam ahead. Then the DoJ antitrust lawsuit was filed in July, and now suddenly in August Aetna can't possibly continue in 11 of those 15 states because of "hundreds of millions in losses."
Oh, and by the way, three of the states Aetna is pulling out of? Florida, Ohio, and Pennsylvania.
You do the math. Charles Gaba has a lot more at his place.