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 Florida, North Carolina and Pennsylvania, 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.”
Besides Florida, Aetna is exiting Arizona, Georgia, Illinois, Kentucky, Missouri, North Carolina, Ohio, Pennsylvania, South Carolina and Texas.
Kevin Counihan, who oversees the ACA marketplaces at the federal Centers for Medicare and Medicaid Services, said in a statement that the Obamacare markets remain strong.
“Aetna’s decision to alter its marketplace participation does not change the fundamental fact that the Health Insurance Marketplace will continue to bring quality coverage to millions of Americans next year,” Counihan said.
Aetna covered about 838,000 people through the Obamacare exchange in its 15 states as of June 30, and on Aug. 2 said it was re-evaluating its approach to the market. At the time, the company said it was scrapping plans to expand into new states for 2017.
“We’ve got to be able to cover the costs associated with providing the care,” Aetna Chief Executive Officer Mark Bertolini said in an interview at the time.
The ACA relies on privately run insurers to offer health plans that individuals can buy, often with government subsidies. About 11.1 million people were signed up for Obamacare plans at the end of March.