The inability to negotiate acceptable low-price contracts with hospitals, physicians, and other providers, along with high utilization rates, is proving to be more than commercial insurers can handle.
Aetna is creating more doubt about the future of Obamacare by withdrawing late Monday from 11 of the 15 individual exchanges for 2017.
The inability to negotiate acceptable low-price contracts with hospitals, physicians, and other providers, along with high utilization rates, is proving to be more than Aetna and other commercial insurers can handle.
The Hartford, CT-based insurer's move opens the door to other carriers to rethink their own participation in the exchanges.
Aetna says it will only sell Obamacare products in Delaware, Iowa, Nebraska and Virginia, citing higher than expected utilization costs. The insurer also says it has lost $430 million in its individual policies unit since the health insurance exchanges opened in January 2014.
"More than 40 payers of various sizes have similarly chosen to stop selling plans in one or more rating areas in the individual public exchanges over the 2015 and 2016 plan years, collectively exiting hundreds of rating areas in more than 30 states," Aetna said in a press release.
"As a strong supporter of public exchanges as a means to meet the needs of the uninsured, we regret having to make this decision."
Aetna's withdrawal is unfortunate, but not surprising, says Michael A. Morrisey, PhD, professor and head of the Department of Health Policy & Management in the School of Public Health at Texas A&M University.
Morrisey notes that in Texas, Aetna was one of seven carriers, including Blue Cross Blue Shield, that reduced the number of plans they offered in 2016 compared to 2015. Aetna reduced its Silver plan offerings by about one-third and had the highest average Silver premium in 2015 but moved aggressively in lowering those premiums in 2016 relative to BCBS.
Gregory A. Freeman is a contributing writer for HealthLeaders.