Aetna Inc., which has signaled for months that mounting financial losses would force its exit from Obamacare, announced Wednesday it is quitting the remaining two states in which it participated.
The Hartford insurer said it will not offer on- or off-exchange individual plans in Delaware or Nebraska in 2018. Aetna had previously announced it will not offer plans in Iowa and Virginia next year.
Aetna said its individual commercial products lost nearly $700 million between 2014 and 2016 and are projected to lose more than $200 million this year despite a significantly reduced membership.
Membership has dropped to 255,000 as of March 31 from 964,000 in 2016.
Aetna's departure adds to the crisis facing the Affordable Care Act, also known as Obamacare, as Republicans push for its elimination and Democrats look to preserve and repair the law.
Aetna's withdrawal comes after the U.S. House of Representatives voted to replace the Affordable Care Act last week with a controversial plan that is expected to face stiff opposition and prolonged debate in the Senate. Meanwhile health insurers in Maryland, Virginia and Connecticut who are remaining part of Obamacare have asked for sharp increases in rates for next year.
Aetna blamed "marketplace structural issues" that have led to health care co-op failures, exits by health insurers and a deteriorating risk pool leaving behind sicker, poorer people that lead to higher insurance rates.
The move was not entirely unexpected. Chief Financial Officer Shawn Guertin told analysts May 2 that Aetna continues to evaluate its footprint in the ACA "with a view toward significantly reducing" its exposure to individual commercial products next year.
"It's not surprising at all," said Spencer Perlman, an analyst at Veda Partners.
Anthem, Centene, Molina and BCBS plans have "for the most part said they are in wait-and-see mode," he said.
He said other insurers could leave the exchanges, but it would depend on what the Trump administration does with federal cost-sharing reduction payments that provide a discount to reduce what's paid for deductibles, copayments and coinsurance.
Iowa is the only state at possible risk of having no exchange plans offered in 2018, Perlman said.
Aetna isn't part of a mass exodus of companies from exchanges as the repeal bill works its way through Congress, said John F. O'Connell, president of C.M. Smith Agency in Hartford and a partner in Alera Group, a nationwide brokerage. The Wall Street Journal reported Tuesday that Blue Cross Blue Shield of Tennessee expanded its coverage amid improved finances in that state, for example.
But the timing is tight as companies meet exchange deadlines. "They're on parallel tracks," O'Connell said. "You have the deadlines looming and you have the Senate taking up the bill."
Aetna Chief Executive Officer Mark Bertolini has long criticized details of the Affordable Care Act. He said recently that with a Republican Congress deadlocked over efforts to repeal the law, Congress should instead turn to a long-overdue fix.
Republicans who want to repeal Obamacare have blamed it for the price increases, saying it has failed to create a competitive market.
Backers of the ACA, chiefly Democrats, blamed the latest higher prices on the threat of repeal that narrowly passed in the House of Representatives and awaits Senate action. A possible repeal will reduce the amount of money available for subsidies and dilute the requirement that all taxpayers have coverage.
(c)2017 The Hartford Courant (Hartford, Conn.)
