Aetna became the latest health insurer to retreat from the Affordable Care Act exchanges this week when the company announced that it would no longer sell so-called Obamacare plans in 11 states, including Florida, for 2017 due to significant financial losses.
Aetna CEO Mark Bertolini blamed a second-quarter pretax loss of $200 million this year and total pretax losses of more than $430 million since January 2014 for the decision.
“As a strong supporter of public exchanges as a means to meet the needs of the uninsured, we regret having to make this decision,” Bertolini said in a written statement announcing the move.
As recently as April, however, Bertolini had told investors during an earnings call that Aetna saw its position on the ACA exchanges as “a good investment.”
Aetna’s reduced presence on the ACA exchange follows similar moves by other insurers that also have complained about financial losses. But the Obama administration pushed back on a growing narrative that Aetna’s reduction represents a challenges to the viability of the public insurance exchanges — the backbone of healthcare reform.
“It’s no surprise that companies are adapting at different rates to a market where they compete for business on cost and quality rather than by denying coverage to people with preexisting conditions,” said Kevin Counihan, CEO of the ACA exchange at healthcare.gov, in a written statement. “But the ACA Marketplace is serving more than 11 million people and has helped America reach the lowest uninsured rate on record.”
Aetna, the nation’s third-largest insurer, said the insurer will reduce its presence to four states for 2017 — down from 15 this year. But Bertolini said Aetna will continue to sell individual and group coverage off the ACA exchange next year in many markets.
A company spokesman declined to say how many Floridians are covered under Aetna’s ACA plans for 2016. But according to the state’s Office of Insurance Regulation, Aetna Health Inc. of Florida covered nearly 285,000 people in Florida through a variety of managed care plans, including about 48,000 people on the individual market, as of March.
Coventry Healthcare of Florida, an Aetna subsidiary selling plans on the ACA exchange, covered nearly 385,000 Floridians through a variety of health plans, including more than 250,000 people on the individual market during the same period.
The Hartford, Connecticut-based Aetna is the latest insurer to discontinue selling plans on the ACA exchange, reducing choices for consumers and potentially driving up premiums. UnitedHealth and Humana have announced their own exchange reductions for 2017. And Harken Health, a UnitedHealth subsidiary, also reversed plans to offer Obamacare coverage in Miami and Fort Lauderdale for 2017.
In Florida, 15 insurance companies have filed requests to sell individual coverage plans that meet the ACA’s minimum benefit requirements, including 11 insurers that requested to sell plans on the exchange.
Before its decision this week, Aetna had filed requests to raise premiums by an average of 17.4 percent in Florida for an HMO plan to be sold on the ACA exchange. In the filing, the company cited rising medical costs, including prescription drugs and hospitalizations, as the reason for requesting the rate increase.
Walter Cherniak, a spokesman, said Aetna began 2016 with approximately 750,000 exchange members in 15 states.
“In past years, we have seen a good deal of membership attrition as the year goes on,” he said, “and we expect that will occur this year as well.”
About 12.7 million people nationwide, including 1.7 million in Florida — the most of any state — get their health coverage through the ACA exchange, according to the Department of Health and Human Services.