Humana will exit Obamacare exchanges entirely for 2018, the insurance giant announced Tuesday.
The pool of customers on Obamacare exchanges has too few healthy patients to balance out the influx of sick and costly customers, the company said in a statement, calling the health care law’s market unstable.
Humana substantially dropped its participation in Obamacare in 2017, cutting the number of states it offered products in from 19 in 2016 to just 11 this year. The insurer also hiked its premiums for the 2017 enrollment period.
“All of these actions were taken with the expectation that the company’s Individual Commercial business would stabilize to the point where the company could continue to participate in the program,” the company said in a statement. “However, based on its initial analysis of data associated with the company’s healthcare exchange membership following the 2017 open enrollment period, Humana is seeing further signs of an unbalanced risk pool.” (RELATED: Humana’s Obamacare Enrollments Plummet In 2017)
The number of customers Humana covered in Obamacare exchanges fell sharply in at the beginning of 2017, when the company cut its participation. Just 152,000 Obamacare customers purchased Humana coverage in January 2017, down from 404,000 the previous month.
Humana has suffered significant losses on the Obamacare market. The insurer announced in December that it was writing off a $583 million loss from the federal government over Obamacare. It was the result of a large proportion of sick customers, leaving the company with a net negative for its exchange business. Obamacare exchanges have been plagued by a larger proportion of sicker, costlier customers than was hoped for.
Part of the individual mandate’s purpose was the ensure that young and healthy people purchased insurance, so that insurance companies would not be besieged with customers whose care costs insurers more than they made in premiums. So far, exchanges have been unable to attract enough healthy participants for insurers to break even.
Humana said that it remains committed to serving current Obamacare customers through the end of 2017.
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