Obamacare is savaging the consumer, as insurance companies roll back their efforts in many states, leaving a single insurance company or no insurance company at all from which a consumer can choose.
The latest example is the decision by Aetna to stop offering insurance around the country except for four states: Delaware, Iowa, Nebraska and Virginia. The company will leave Arizona, Florida, Georgia, Illinois, Kentucky, Missouri, North Carolina, Ohio, Pennsylvania, South Carolina, and Texas, according to Bloomberg.
According to USA Today, Aetna said that in 2017 its exit would affect 68.9% of the counties where it offered plans in 2016. Aetna had a pre-tax loss of $200 million on its individual health care plans in the second quarter of 2016, and stated that the reason for the loss was the lack of healthy plan members using their plans as opposed to the vast number of users who depended on the plan to pay for their illnesses. Aetna has roughly 1.1 million individual enrollees, roughly 838,000 of whom purchased their coverage on the Obamacare exchanges.
That has been the concern about Obamacare all along, that it was infeasible because it depended on young healthy subscribers to mitigate the costs of unhealthy clients.
Aetna CEO Mark Bertolini said, "As a strong supporter of public exchanges as a means to meet the needs of the uninsured, we regret having to make this decision. We will continue to evaluate our participation in individual public exchanges while gaining additional insight from the counties where we will maintain our presence, and may expand our footprint in the future should there be meaningful exchange-related policy improvements."
Kevin Counihan, CEO of the government's Marketplace exchanges, protested that Obamacare is developing an "improving risk pool,” adding, "Aetna’s decision to alter its Marketplace participation does not change the fundamental fact that the Health Insurance Marketplace will continue to bring quality coverage to millions of Americans next year and every year after that. 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."
The company will leave Arizona, Florida, Georgia, Illinois, Kentucky, Missouri, North Carolina, Ohio, Pennsylvania, South Carolina, and Texas,
Aetna was not the only company to suffer heavy losses and consider pulling out of various states; UnitedHealth Group Inc. has said it expects to lose $650 million this year, and decided to exit Arkansas, Georgia and Michigan in 2017. Humana Inc., which Aetna has agreed to buy for $37 billion, has considered exiting exchanges as well.
Aetna has said it will buy Humana Inc. for $37 billion, but the U.S. Justice Department sued to block the effort, ironically claiming the combination would harm competition. UnitedHealth Group Inc. has said it expects to lose $650 million this year, and decided to exit Arkansas, Georgia and Michigan in 2017.
In one Arizona county, Pinal County in Arizona, Aetna’s exit will leave the county at risk of having no insurers offering exchange plans in 2017, The Wall Street Journal reports. Blue Cross Blue Shield of Arizona said in June that it would exit Pinal County and Maricopa County. The Journal reports that the five largest insurance companies expect to lose money this year.