As we have been reporting, Aetna is making major cuts in the individual coverage it is offering on the Affordable Care Act’s exchanges. Some of us know them as marketplaces. The company is leaving 11 of the 15 states it now serves. As a result, 80% of Aetna’s customers will be impacted.
Experts say the exit could be the future for ObamaCare. Humana cut its participation in exchanges from 15 states to 11. United Health did a much publicized exit last year. Anthem is predicting losses of somewhere around 5% this year. Cigna also admits to losing money. It is — however — the only insurer that is now planning on expanding. Cigna will move into three new states in 2017.
Everyone from politicians to the general public are asking why? They are also asking who is next?
The why is much easier. Insurers are losing money on the Affordable Care Act participation and reinsurance offered by the federal government hasn’t offset losses and when it goes away at the end of this year, the losses will grow even greater. And as insurers exit, health insurance rates are expected to rise for those participating in the exchanges.
Insurer losses are easily traced to the huge number of people signing up that have serious health issues. Not enough healthy people are registering to offset those losses.
That leads to a very important question. Will the Affordable Care Act — President Obama’s signature legislation — survive? Maybe. Maybe not. To survive healthier people — says former White House health policy advisor Zeke Emanuel — must sign up and participate. “You have here a situation which all of us who care about the exchanges have to worry about. There is a problem with the risk pool. There is a problem with the numbers of people signing up,” he said.
But do the exchanges really need the big insurers? Robert Wood Johnson Foundation senior advisor Katherine Hempstead says no. In fact, she suggests they haven’t been that important all along.
“I think the market could survive without these guys. Obviously, it would be better to see lots of people seeing a lot of opportunity in this space. But I don’t think it’s a chapter in a Greek tragedy,” she said.
The Aetna news also sparked — no surprise — a political explosion from both sides of the aisle and from the two presidential candidates. Donald Trump said the Aetna move is further evidence that the Affordable Care Act is broken and “slowly imploding under its regulatory red tape.”
Trump continues to promise repeal and to do away with the individual mandate, cut Medicaid expansion and to create a system where health insurers can sell across state lines. “We will have alternatives that will be so good, so much less expensive, so much better that you will actually be able to keep your doctor and have your plan. That was the biggest [ObamaCare] lie of all of them. Premiums are going up 45% to 55% and we are just going to do something and it’s going to be great. We’re going to end up having great, great healthcare,” Trump said.
Hilary Clinton said the departure of Aetna means we need to “defend and improve” ObamaCare. She proposes cutting out-of-pocket costs to consumers and adding a public insurance option.
On the public insurance option, Clinton said a government health insurance company is a way of “giving Americans, in every state, a choice of a public option health insurance plan that will help everybody afford coverage. It will strengthen competition and drive down costs.”
Source links: MSN Money, The Hill, two from Insurance Business America — link 1 and link 2