Nebraskans and Iowans should still be able to buy an individual Aetna policy on the federal government’s health insurance marketplace next year, but insurance seekers in 11 other states will no longer have that option.
The Hartford, Connecticut-based insurer said this week that it plans to sell coverage on Affordable Care Act exchanges in just four states — Nebraska, Iowa, Virginia and Delaware — down from 15 this year. Aetna now offers coverage in Nebraska under the brand Coventry, but next year it will be under the Aetna brand.
Aetna’s announcement is the latest signal by large health insurers that they are struggling to make money in the exchanges.
The enrollment period for 2017 coverage begins Nov. 1, and insurers have been finalizing their plans to participate in the exchanges, which customers use to compare and purchase coverage.
In Nebraska, Insurance Director Bruce Ramge said Tuesday that the hope is that there will be “three insurance companies on the exchange” — Blue Cross Blue Shield of Nebraska, Medica and Aetna — with each having multiple plans.
But “this isn’t final until they sign on with the federal government in late September,” Ramge said. “Hopefully we won’t see other dropouts.”
UnitedHealth Group said earlier this year that it would no longer offer individual coverage in Nebraska and Iowa. It sold coverage in 34 states this year but plans to offer policies in only three states next year. Customers with individual UnitedHealth policies will remain covered through this year but will have to find new 2017 coverage during the open-enrollment period.
Nationally, Humana also has announced exchange pullbacks for 2017, trimming its participation from 15 states to 11, and more than a dozen nonprofit insurance co-ops have shut down in the past few years.
Also, Catholic Health Initiatives, parent company to CHI Health in Nebraska and southwest Iowa, withdrew its application this year to offer commercial health insurance in Nebraska, another sign of the volatility of the health insurance market in the era of the Affordable Care Act, also known as Obamacare.
In Iowa, Wellmark Blue Cross Blue Shield has formed two new health insurance companies with providers — one with Mercy Health Network (Wellmark Value Health Plan) and one with the University of Iowa Health System (Wellmark Synergy Health).
Those two Wellmark companies are among those that have applied to be part of the federal marketplace for 2017, a spokesman for the Iowa Insurance Division said Tuesday. The others are Gundersen Health Plan, Aetna Health of Iowa, Medica Insurance Co. and Sanford Health Plan. Wellmark would be new to the marketplace, and UnitedHealth is the lone Iowa dropout.
The Wellmark plans and Gundersen are for individual and small-group plans. Aetna and Medica are individual plans only. Sanford is small-group plans only, spokesman Chance McElhaney said in an email.
“The coverage area ranges from smaller regional insurers to statewide, but we won’t know for sure who Iowans will choose from until the companies sign final agreements with the federal marketplace later in September,” McElhaney said.
Aetna, the nation’s third- largest insurer, said a second- quarter pre-tax loss of $200 million from its individual insurance coverage and other factors, including the spiraling cost of some expensive drugs, helped it decide to reduce its public exchange participation.
Mark Bertolini, Aetna’s chairman and chief executive, said: “Providing affordable, high-quality health care options to consumers is not possible without a balanced risk pool. 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.”
Competition is supposed to help mitigate price increases, and a decline in the number of participating insurers in the exchanges has become cause for concern in some states.
Alaska and Oklahoma, for example, will be left with only one participant selling individual coverage for 2017. And many insurers already have said they plan to increase policy prices by 10 percent or more next year.
U.S. Sen. Ben Sasse, R-Neb., who published a report on the Affordable Care Act’s lack of competition on the 2016 exchanges, said Tuesday that “Aetna’s exit isn’t the beginning and it won’t be the end, but it is another unmistakable sign of Obamacare’s slow-motion death spiral. With ugly withdraws, painful co-op failures and rotten choices and costs, Obamacare’s collapse is crushing American families.”
Aetna’s Bertolini said the company hasn’t ruled out a future expansion on the exchanges, “should there be meaningful exchange-related policy improvements.”
In an emailed statement, Kevin Counihan, chief executive of the federal exchange operator HealthCare.gov, said “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 and every year after that.”
The U.S. Department of Health and Human Services said earlier this year that 20 million people, including more than 6 million previously uninsured young adults, have gained health insurance coverage since the Affordable Care Act was enacted in 2010.
That includes young people staying on their parents’ policies longer and people who previously couldn’t get insurance because of pre-existing health conditions.
For coverage this year, 87,835 Nebraskans and 55,089 Iowans enrolled in health insurance plans through the exchange, according to the Health and Human Services Department.
Some insurers say it’s a relatively small portion of their business that has generated huge losses since they began paying claims in 2014. In particular, they’ve struggled to enroll enough healthy participants to balance the claims they pay from high-cost customers. Another sore point: Insurers have complained about the steep shortfalls in support from government programs designed to help offset costs.
Still, some insurers are expanding on the exchanges.
Cigna Corp., which now offers coverage in seven states, plans to add some new markets next year, including Chicago, Raleigh, North Carolina, and northern Virginia.
Molina HealthCare also is expanding its business, and Health Care Service Corp., which sells Blue Cross Blue Shield coverage on exchanges in four states, will add New Mexico in 2017.
Sabrina Corlette, a research professor with the Georgetown Health Policy Institute, said it may still take a few more years for exchange participation to settle and the government may have to change some of the market rules. “But I don’t think the marketplaces are crashing and burning by any means,” she said.
This report includes material from the Associated Press.
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