Health care giant Aetna is pulling out of 11 state insurance exchanges — including in Pennsylvania— citing ongoing financial losses.
The company, which has approximately 31,000 individual policyholders in Pennsylvania, said it has lost $430 million by selling health plans through the insurance exchanges created under the Affordable Care Act. It follows in the footsteps of UnitedHealth Group and Humana, which also announced plans to cut back their participation in the exchanges.
“The market is very volatile. It’s new,” said Rob Field, a health care expert with Drexel University. “This is only the third year of the Obamacare exchanges, so companies are still testing the waters.”
Aetna’s decision is considered by some another blow to the long-term viability of the exchanges, a key piece of President Obama’s health care reform law. Field, however, doesn’t give the move as much significance.
“I think it is more of a nick than a blow,” he said. “It doesn’t help the law, but it is not fatal by any means.”
Earlier this year, Aetna signalled it would again sell policies in Pennsylvania’s marketplace in 2017, and it said it may consider participating in the exchanges sometime in the future.
“I am disappointed Aetna is withdrawing from the federal health insurance marketplace in Pennsylvania, and many other states, due to financial losses on the state exchanges created under the Affordable Care Act,” said Teresa Miller, commissioner of Pennsylvania’s Insurance Department. “While this reduces the health insurance plans available to Pennsylvanians in the individual market, all Pennsylvanians continue to have choices.”
Independence Blue Cross has dominated the exchanges in Southeastern Philadelphia, and it will likely pick up a bulk of the business from Aetna’s decision not to sell plans in 2017.
Aetna announced it will still sell policies in four individual state marketplaces, including in Delaware. The company is requesting a 25 percent rate hike in the First State, something regulators are pushing back on.