Aetna, one of the nation’s largest health insurers, announced Monday it is pulling out of all but four state exchanges in 2017. It is currently offering exchange plans in 15 states.
Aetna is only the latest insurer to reduce its marketplace presence, citing losses. The news also comes amid reports of double-digit premium hikes next year, another sign of financial trouble for insurers. Most of the nonprofit co-op plans created under the health care law have also shuttered.
“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,” said Aetna chairman and CEO Mark Bertolini in a statement.
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The health insurance exchanges that are the beating heart of Obamacare are on the edge of collapse, with premiums rising sharply for ever narrower provider networks, non-profit health co-ops shuttering their doors, and even the biggest insurance companies heading for the exits amid mounting losses. Even the liberal Capitol Hill newspaper is warning of a possible “Obamacare meltdown” this fall.
Three states – Alaska, Alabama, and Wyoming – are already down to just a single insurance company, as are large parts of several other states, totaling at least 664 counties.
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The next president could be dealing with an ObamaCare insurer meltdown in his or her very first month.
The incoming administration will take office just as the latest ObamaCare enrollment tally comes in, delivering a potentially crucial verdict about the still-shaky healthcare marketplaces.
The fourth ObamaCare signup period begins about one week before Election Day, and it will end about one week before inauguration on Jan. 20. After mounting complaints from big insurers about losing money this year, the results could serve as a kind of judgment day for ObamaCare, experts say.
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Americans should be more worried than ever about Medicaid, which provides health insurance for America’s most vulnerable. The cost of the $500 billion program is expected to rise to $890 billion by 2024, according to the Centers for Medicare and Medicaid Services. Yet more spending doesn’t necessarily mean better care for beneficiaries, 57% of whom are low-income minorities. The expansion of Medicaid is one of the most misguided parts of ObamaCare—shamefully expanding second-class health care for the poor.
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Aetna’s decision to abandon its ObamaCare expansion plans and rethink its participation altogether came as a surprise to many. It shouldn’t have. Everything that’s happened now was predicted by the law’s critics years ago.
Aetna CEO Mark Bertolini said that this was supposed to be a break-even year for its ObamaCare business. Instead, the company has already lost $200 million, which it expect that to hit $320 million before the year it out. He said the company was abandoning plans to expand into five other states and is reviewing whether to stay in the 15 states where Aetna (AET) current sells ObamaCare plans.
Aetna’s announcement follows UnitedHealth Group’s (UNH) decision to leave most ObamaCare markets, Humana’s (HUM) decision to drop out of some, Blue Cross Blue Shield’s announcement that it was quitting the individual market in Minnesota, and the failure of most of the 23 government-created insurance co-ops.
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Humana is the latest health insurer to significantly pull back its participation selling subsidized individual coverage under the Affordable Care Act, announcing plans to scale back next year to “no more than 156 counties” across 11 states.
The decision means Humana will reduce its Obamacare geographic presence by nearly 1,200 counties from the 1,351 counties across 19 states where the insurer currently sells individual coverage on exchanges under the health law now. UnitedHealth Group is scaling back to three states and Aetna said this week it was evaluating its participation in 15 states and wouldn’t expand to new states next year.
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Hospital system Catholic Health Initiatives’ experiment with health insurance has hit the end of the road after a couple years of heavy losses. CHI is “exploring options to sell” its health plan subsidiary, executives said in new financial documents.
The documents, released this week to bondholders, explain that top CHI executives “decided to exit the health insurance business” in May after undergoing a strategic review in March. CHI’s consolidated insurance division, QualChoice Health, formerly known as Prominence Health, has hemorrhaged money since its inception. QualChoice sells Medicare Advantage plans and commercial plans to employers in six states.
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July has been rough for Obamacare’s non-profit co-op health plans. Four closed after running out of money — three in just one week. Just seven of the original 23 co-ops are still standing. Those seven all lost money last year — and may yet go out of business before the calendar turns to 2017.
All that failure has been pricey. Taxpayers are out $1.7 billion in federal loans that these co-ops will never pay back.
The co-ops stand out as perfect examples of how Obamacare’s idea of government-managed “competition” is doomed to fail.
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A network of clinics that serves low-income patients in rural Northern California is finally finding balance after being deluged with newly insured patients under the Affordable Care Act.
After a more than two-year moratorium on nearly all new adult patients, the Redding-based Shasta Community Health Center has reopened its doors to some newcomers this month, and it will start accepting more new patients in September.
When Medi-Cal, California’s version of Medicaid, was first expanded under the Affordable Care Act in early 2014, the number of people insured under the program doubled to around 40,000 people in the region served by Shasta Community Health. Not only did the clinics see new patients, but the demand for services soared from existing ones who were newly insured.
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A company that offers health insurance plans in New Hampshire under the Affordable Care Act is suing the federal government over a part of the health care law.
The lawsuit from Minuteman Health aims to block the current form of the federal Risk Adjustment program, which aims to stabilize the health care market by spreading the costs that come from covering sicker people among insurers with healthier clients.
CEO Tom Policelli says what’s actually happened is that health care co-ops like Minuteman pay millions to their larger competitors that offer more expensive plans.
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