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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Aetna Inc., facing more than $300 million in losses from Affordable Care Act health plans this year, may exit Obamacare markets in some states as challenges to the health-care overhaul pile up.
While the health insurer has yet to leave any states in which it now sells Obamacare programs, Chief Executive Officer Mark Bertolini said Aetna is evaluating its participation by market and will start making decisions in coming weeks. The company, which covers 838,000 people through Obamacare, is halting a planned expansion of those offerings in new states for next year.
“We’ve got to be able to cover the costs associated with providing the care,” Bertolini said in an interview.
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Usually it’s a good thing that everything’s bigger in Texas, but that isn’t true when it comes to health-insurance premiums for Obamacare. Recent federal data show that Texas’ largest insurer on the Obamacare exchanges is seeking average premium increases of nearly 60 percent for 2017- among the highest hikes in the entire country.
As a result, at least 600,000 policyholders with Blue Cross Blue Shield may quickly find their insurance coverage is unaffordable.
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Insurers want to crank up the cost of health insurance premiums by as much as 45 percent for Illinois residents who buy coverage through the Affordable Care Act’s marketplace.
Blue Cross Blue Shield of Illinois, the most popular insurer on the state’s Obamacare exchange, is proposing increases ranging from 23 percent to 45 percent in premiums for its individual health-care plans, according to proposed 2017 premiums that were made public Monday. The insurer blamed the sought-after hikes mainly on changes in the costs of medical services.
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Two more health cooperatives have filed lawsuits against the Obama administration over a program in which insurers compensate each other for taking on sicker customers under the Affordable Care Act, following a similar lawsuit in June from another startup company.
New Mexico Health Connections and Minuteman Health of Massachusetts filed their cases on Friday afternoon, arguing the Obama administration mismanaged the program known as “risk adjustment” by creating an inaccurate formula that overly rewarded big insurers.
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In a Health Affairs article, Loren Adler and Paul Ginsburg from the Center for Health Policy at the Brookings Institution make the claim that Obamacare has lowered health insurance premiums. Adler and Ginsburg claim that, in 2014, premiums for the second-lowest cost “silver” plan were “between 10 and 21% lower than average individual market premiums in 2013,” the year before Obamacare went into effect. Yet the Government Accountability Office has found that, in early 2013, the median plan in the median state for a healthy 30-year-old man had an annual premium of just $1,558. By comparison, according to the Kaiser Health Calculator, the nationwide average annual premium for the second-lowest cost “silver” plan for a 30-year-old man is now $3,186—more than twice as much.
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Aetna Inc, the nation’s third largest health insurer, said on Tuesday that it no longer plans to expand its Obamacare business next year. The insurer, which is losing money on the plans it sells in 15 states to individuals on exchanges created under the Affordable Care Act, said it also was looking at whether it should continue to offer the contracts. Aetna said its exchange-based plans for individuals had a pretax operating loss of $200 million in the second quarter, and it projected the loss from that business would exceed $300 million by year-end. It had initially expected to break even on the plans.
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Health plans sold on Michigan’s insurance exchange could see an average 17.3% increase next year, and if recent history is any guide, state regulators could approve the insurance companies’ rate hike requests without many — if any — changes.
The rate increases would mean a financial hit for taxpayers in general and the 345,000 Michiganders who buy their health insurance on the Healthcare.gov exchange, created under the Affordable Care Act, also known as Obamacare.
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A sampling of the 2017 proposed rate increases:
Blue Care Network of Michigan is seeking an average 14.8% rate increase for its plans.
Blue Cross Blue Shield wants an 18.7% increase.
Priority Health has asked for a 13.9% rate hike.
The biggest rate request is from Humana — a 39.2% rise.
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A new wave of failures among ObamaCare’s nonprofit health insurers is disrupting coverage for thousands of enrollees and raising questions about whether regulators could have acted earlier to head off some of the problems.
Four ObamaCare co-ops have failed due to financial problems since the beginning of the year, the latest trouble for the struggling program.
The co-ops were set up under ObamaCare to increase competition with established insurers, but just seven of the original 23 co-ops now remain.
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