Aetna’s announcement that it will reduce its Affordable Care Act (ACA) participation to four state exchanges in 2017 is the latest bad news for consumers who buy their health insurance through the ACA marketplace and another cause for criticism for the president's signature legislation.
Aetna will remain in the insurance exchanges in Delaware, Iowa, Nebraska and Virginia and will offer off-exchange individual coverage to residents in most of the counties where it participated in 2016 ACA exchanges.
The announcement was met with significant criticism.
“Our health care system is broken, and Obamacare didn’t fix it -- it made it worse,” U.S. Rep. Mark Walker (R-NC) recently told Patient Daily. "When selling Obamacare to the American people in 2009, President Obama said, ‘My guiding principle is, and always has been, that consumers do better when there is choice and competition.’ On that I have to agree with the president."
Although supporting the idea of affordable health care, Walker does not support its current execution.
“Obamacare has limited choices for patients, driven up costs and buried employers under thousands of new regulations,” Walker said.
With Aetna’s withdrawal from Walker’s home state of North Carolina, Blue Cross and Blue Shield will be the only company on the exchange for all of the state’s 100 counties. The insurer is seeking double-digit increases in 2017, naming large losses to justify increased fees.
Another possible explanation for the desertion of multiple insurers from multiple markets is the fact that the federal reinsurance program ends in 2016. This program has been a safety net for insurers, paying them for much of the cost of the most expensive, unhealthy enrollees. In 2017, insurance providers will shoulder the entire cost themselves.
“We need to replace Obamacare’s one-size-fits-all approach with innovative, patient-centered solutions that offer more choices and lower costs, not false promises,” Walker said.
Along with the announcement that they were scaling back Aetna reported total pretax losses of over $430 million in individual products since January 2014.
“Providing affordable, high-quality health care options to consumers is not possible without a balanced risk pool,” Aetna Chairman and CEO Mark Bertolini said in a statement regarding the company’s 2017 ACA exchange participation.
Health insurers consider a balanced risk pool to consist of an equal proportion of healthy to sick enrollees.
Aetna has reported a $200 million pretax loss for this year’s second quarter.
“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,” Bertolini said. “This population dynamic, coupled with the current inadequate risk adjustment mechanism, results in substantial upward pressure on premiums and creates significant sustainability concerns.”
Walker's home state is not alone in its struggles with the ACA. Several others are dealing with myriad problems related to ACA coverage, as well.
Earlier this month, Illinois ACA marketplace enrollees learned they can expect double-digit increases next year from Blue Cross and Blue Shield, Coventry Health Care of Illinois and Harden Health Insurance Company. There will also be fewer choices in states like Illinois, where UnitedHealthcare announced their departure and the state's health care co-op, Land of Lincoln Health, was liquidated. Land of Lincoln Health was one of 23 nationwide nonprofit health insurance co-ops established under the ACA.
Over a dozen of the ACA co-ops have gone out of business. The future of the remaining companies is questionable due to the fact that it takes substantial capital to keep a startup afloat during its infancy.
