One of the nation’s biggest insurance providers is pulling away from the Obamacare marketplace after losing $200 million in the past three months.
Aetna, one of the top five medical insurance companies in America, will stop offering insurance plans to in states where it currently provides coverage through individual exchange marketplaces, the company announced Monday.
For the second quarter of 2016, Obamacare cost Aetna a “pretax loss of $200 million and total pretax losses of more than $430 million since January 2014,” Aetna CEO Mark Bertolini said in the statement.
Many of the people enrolled in Aetna insurance in 2016 required high-cost procedures, Bertolini said, and because Obamacare has an “inadequate risk adjustment mechanism,” the company had no way of recuperating losses.
“The vast majority of payers have experienced continued financial stress within their individual public exchange business due to these forces, which also are reported to have contributed to the failure of 16 out of 23 co-ops,” Bertolini said.
Aetna’s pull back from Obamacare follows retreat of other insurance companies. Humana announced in July that it would not offer insurance to key areas in 2017. UnitedHealth Group, the biggest insurer in the U.S., pulled out of most state exchanges in April.
Sen. Elizabeth Warren said Aetna’s actions are retribution for the Department of Justice (DOJ) blocking a planned merger with Humana this past summer.
“The health of the American people should not be used as bargaining chips to force the government to bend to one giant company’s will,” Warren said in a Facebook post last week.
The DOJ blocked the $34 billion merger between Aetna and Humana, along with a $48 billion merger between Anthem and Cigna, in July.
“If allowed to proceed, these mergers would fundamentally reshape the health insurance industry,” Attorney General Loretta Lynch said at a July 21 press conference. “They would leave much of the multi-trillion dollar health insurance industry in the hands of three mammoth insurance companies, drastically constricting competition in a number of key markets that tens of millions of Americans rely on to receive health care.”
Aetna has been a supporter of Obamacare since the beginning of the health care law, and said it hopes to return when the market improves for insurers.
“We are committed to a health care marketplace that gives every American the opportunity to access affordable, high-quality care,” Bertolini said. “We will continue to evaluate our participation in individual public exchanges while gaining additional insight from the counties where we will maintain our presence, and may expand our footprint in the future should there be meaningful exchange-related policy improvements.”
Aetna will offer individual insurance through Obamacare in only four states, Delaware, Iowa, Nebraska and Virginia, according to the statement. They will still offer individual insurance to the other states in 2017, just not through Obamacare.
Aetna was the only insurer to offer plans for some parts of Arizona, which will now be without options within the Obamacare exchange.
“We are working collaboratively with the Arizona Department of Insurance and remain confident that all Arizona residents will have access to coverage next year,” U.S. Department of Health and Human Services spokeswoman Marjorie Connolly told The Hill.
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