Aetna to Exit Iowa's Affordable Care Act Insurance Marketplace in 2018
April 06 2017 - 2:19PM
Dow Jones News
By Anna Wilde Mathews
Aetna Inc. became the second insurer this week to say it will
exit the Affordable Care Act insurance marketplace in Iowa next
year, in the latest sign that the industry is pulling back from the
exchanges amid uncertainty about the future of the business.
Aetna's move came in the wake of an announcement Monday by
Wellmark Blue Cross and Blue Shield, which said it would stop
selling ACA plans in Iowa after losing about $90 million over three
years. The pullouts leave two insurers still selling plans on the
state's ACA exchange.
In February, Humana Inc. said it would stop selling exchange
plans in the 11 states where it currently offers them. These
decisions likely foreshadow a broader fraying of the ACA coverage
map, as major insurers Anthem Inc., Molina Healthcare Inc. and
Cigna Corp. have said they are reviewing their exchange offerings
and may pull back without signs of increased stability. An analyst
has suggested Anthem's withdrawal could be extensive, though the
company itself hasn't offered new details on its plans and said it
would "continue to actively pursue policy changes that will help
with market stabilization."
Aetna said its move in Iowa came "as a result of financial risk
and an uncertain outlook for the marketplace" and it was "still
evaluating Aetna's 2018 individual product presence in our
remaining states." Aetna currently offers exchange plans in four
states -- Iowa, Delaware, Nebraska and Virginia -- a sharp
reduction from its presence last year. It has more than 30,000
enrollees in Iowa.
Republican hopes of quickly passing a major health overhaul law
are sputtering, and insurers are nervous about the posture of the
Trump administration, which has sent mixed signals about its intent
to prop up the exchanges.
The exchanges have proved a difficult business for many
insurers, and several companies already pulled back this year after
losses, including UnitedHealth Group Inc. and Aetna. Still, every
U.S. county had at least one exchange insurer in 2017, partly due
to efforts by the Obama administration to persuade companies to
stick around.
Though the Trump administration has proposed a rule aimed at
stabilizing the exchanges, which included several moves favored by
insurers, it hasn't firmly and publicly committed to continuing
federal payments of a subsidy that helps low-income ACA enrollees
pay their deductibles and out-of-pocket costs. Without those
payments, insurers have said that marketplace withdrawals and sharp
rate increases become far more likely for next year.
Aetna's decision, in the wake of Wellmark's, creates heavy
pressure on Iowa's other two exchange insurers -- typically,
insurers are reluctant to be the last to withdraw, but they are
also leery of enrolling consumers who led to significant losses for
their departing competitors.
The remaining Iowa exchange insurers are Medica, a nonprofit
that offers plans in every county, and Gundersen Health Plan, which
sells exchange plans in five Iowa counties, according to the Kaiser
Family Foundation. If both continued their current geographic
footprints, no Iowa counties would be without an exchange
insurer.
A spokesman for Medica said, "We are currently evaluating the
situation and our options." A spokeswoman for Gundersen didn't
immediately return calls.
Iowa's insurance commissioner, Doug Ommen, a Republican, said
officials were "deeply troubled by the angst and concern the
Affordable Care Act is causing in Iowa" and that Congress needs to
fix the problem.
Humana's departure left 16 counties in the Knoxville area of
Tennessee with no exchange insurer, assuming other companies
continue offering plans in their current locations. A spokesman for
the Tennessee insurance regulator said that it has gotten no
commitment yet that any insurer will enter the Knoxville region,
and "we have no assurances that companies will remain in their
existing market areas in the future."
He added that "absent any national direction, there could be
Tennesseans who currently buy insurance who may not have any choice
for insurance on the exchange in 2018." Tennessee's U.S. Sens.
Lamar Alexander and Bob Corker, both Republicans, have introduced a
bill that would tweak the ACA's rules with a goal of helping people
who want exchange plans but don't have an insurer offering them in
their region.
Write to Anna Wilde Mathews at anna.mathews@wsj.com
(END) Dow Jones Newswires
April 06, 2017 15:04 ET (19:04 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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