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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It’s hard to exaggerate the alchemy of distortions that are turning ObamaCare into such a pending disaster that big insurers like Aetna, Anthem, Humana and UnitedHealth Group,once supporters, can’t cut back their participation fast enough.
ObamaCare was always going to be a questionable deal for taxpayers if the only people who signed up were poorer people whose premiums were largely paid by taxpayers. That was fine as far as insurers were concerned. They can make a profit even if taxpayers are the only ones paying.
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Competition on the Obamacare marketplaces will decline next year. There will be significantly more places in the country where customers have no choice of health insurance because just one company signed up to sell coverage.
This is the conclusion that health policy experts have increasingly gravitated toward in recent months and weeks, as major insurance companies have announced hundreds of millions of dollars in financial losses on the Obamacare marketplaces.
“Under any likely scenario, there will be less insurer participation in the exchanges in 2017 than there was in 2016,” says Michael Adelberg, a senior director at FaegreBD Consulting who previously worked in the Obama administration helping to manage the marketplaces’ launch.
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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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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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Aetna became the latest health insurer to cast doubt upon its future in the Affordable Care Act’s insurance exchanges after it called off a planned expansion Tuesday and suggested it could abandon that market completely.
A departure by Aetna, the nations’ third-largest insurer, could further reduce the number of choices for customers and eventually push insurance prices higher. Competition by insurers is a key feature of the exchanges, designed to keep a lid on prices, but several insurers are abandoning them because they are losing enormous amounts of money.
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On Monday, Illinois citizens were jolted by a piercing pain in the wallet as federal officials unveiled proposed Obamacare insurance premium rates for 2017. Insurers plan to dial up rates as much as a heart-stopping 45 percent for those who buy plans on the Obamacare marketplace when open enrollment starts Nov. 1.
That means thousands of people will scramble for affordable insurance … and won’t find it.
Is this rate shock unforeseen? Not really. Rocketing Obamacare rate requests have become an annual rite of summer, as welcome as sunstroke.
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The latest rates for health insurance under Obamacare in New Hampshire range from a drop of less than a half-percent to nearly a 60 percent increase, depending on the insurer.
All insurers offering health plans in the exchange had to present their proposals by Monday for the year beginning Jan. 1.
The dominant health insurer, Anthem, had the lowest proposal — a decrease of four-tenths of 1 percent from the preferred provider organization for the “off exchange” population.
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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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Health insurers have been taking a financial beating for the ages on ObamaCare, but Aetna was always more bullish than the rest of the industry—until now. The entitlement’s keenest corporate patron announced Tuesday that it is cancelling its ObamaCare expansion plans for 2017 and may withdraw altogether.
Aetna posted fabulous second-quarter earnings, though the exception is its Affordable Care Act line of business that the company expects will lose more than $300 million this year. Aetna runs ObamaCare plans in 15 states and planned to join another five exchanges.
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