Aetna Posts $300 Million Obamacare Loss, Warns May Exit Altogether
After every other major US health insurance provider already admitted to generating substantial losses on the Affordable Care Act, known as Obamcare, earlier today Aetna became the latest to report that its annual loss on Obamacare plans would be more than $300 million, and said it had scrapped plans to further expand its Obamacare business next year. More ominously, Aetna joined the biggest US health insurer UnitedHealth in reviewing how, if at all, it would continue providing ACA services in the 15 states it’s currently in.
The move, coming after a similar shift in tone last week by Anthem, is the latest sign of instability and financial pressures in the marketplaces that are at the heart of the health law. It also confirms that in its current iteration, Obamacare simply does not work and will require a major overhaul by the next administration, one which could lead to even higher premiums for plan participants as well as for subsidy providers, i.e., taxpayers.
Aetna, which had previously expressed relative optimism about the ACA exchanges, said it was setting up a reserve of $65 million to account for expected losses on individual plans over the rest of 2016. The company also said it no longer expects to reach breakeven in 2016 on individual plans.
“While we are pleased with our overall results, in light of updated 2016 projections for our individual products and the significant structural challenges facing the public exchanges, we intend to withdraw all of our 2017 public exchange expansion plans, and are undertaking a complete evaluation of future participation in our current 15-state footprint,” said Aetna Chief Executive Mark T. Bertolini. Aetna had previously made regulatory filings indicating it was considering growing into five new state marketplaces in 2017. – READ MORE