Major Health Insurers Abandon ObamaCare Exchanges

Anthem Blue Cross, Aetna, United Health Group, and Humana have all decided against participating in various states' ObamaCare health insurance exchanges. The exchanges, which are scheduled to begin operation on October 1st, will be the only place Americans can purchase health insurance using federal subsidies granted by President Obama’s signature healthcare reform law.

According to ObamaCare's individual mandate, all Americans are required to purchase a government-approved health insurance plan. Americans who do not obtain health insurance through an employer or Medicaid must purchase it through the exchanges in their home state. Some exchanges will be run by the state government, while others by the federal government or a combination of the two.

In the wake of the withdrawal of major health insurers from some state exchanges, state insurance officials are emphasizing that their states will have plenty of “choice” and “competition” come October 1st.

CNS News.com reports that Aetna, a fortune 100 company with $34.2 billion in revenue, has left the exchanges in three states, including Connecticut, home of its main headquarters.

According to the Hartford Courant, Aetna withdrew “its application to sell individual health insurance plans through a public exchange after the state Insurance Department told the insurer its proposed rates were too high.”

The Courant indicates that, when state regulators told Aetna its rates were too high, the company did not accept the modified rates.

“This is not a step taken lightly, and was made as part of [a] national review of our exchange strategy,” said Aetna spokeswoman Susan Millerick. “Unfortunately, we believe the modifications to the rates filed by Aetna will not allow us to collect enough premiums to cover the cost of the plans and meet the service expectations of our customers.”

The Courant reports the Connecticut Insurance Department said that Aetna’s price reflected a 10 percent assumed increase in medical and pharmacy services, and that the department wanted that decreased to 8.5 percent. In addition, the Insurance Department would not allow for an 8.1 percent risk adjustment since the Department does not allow risk adjustments in the first year of pricing.

Kevin Counihan, CEO of Connecticut’s health exchange, reportedly said that consumers will continue to have considerable choices without Aetna.

However, according to USA Today, only three insurers remain in Connecticut to offer individual health plans in the exchange.

Aetna is also withdrawing from Maryland’s exchange for individual health plans and from Georgia’s exchange for both individual and small-group plans. Aetna is also not participating in California’s exchange, although it had reportedly never planned to do so.

According to recorderonline.com, Anthem Blue Cross has withdrawn from offering small business plans in California’s exchanges after state insurance commissioner Dave Jones said the company demonstrated repeated unreasonable rate increases.

Referring to Anthem’s rate increases as “excessive” and “unjustified,” Jones said:

Anthem will continue selling in the small group health insurance market in California outside the exchange, so there is no impact on choice or competition in the small group market overall. It does mean that Anthem will not have access to federal tax credit and taxpayer subsidized business in the small group market exchange, which is as it should be given Anthem’s pattern of unreasonable rate increases.

United Health Group, the nation’s largest health insurer, has abandoned California’s exchange for individual plans, according to californiahealthline.org.


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