Aetna quits Pennsylvania Obamacare

Aug. 17--Health insurer Aetna is pulling out of the Affordable Care Act marketplace in Pennsylvania next year, part of the company's wider withdrawal from 11 of 15 states.

The decision by the Hartford, Conn., company to join other major insurers who've pulled out of ACA markets is the latest blow to President Barack Obama's signature domestic policy law.

In Pennsylvania, Aetna covers 31,000 marketplace customers, or 6 percent of the total, according to the state Insurance Department. It is one of seven insurers who this year offered coverage in the department's Region 6, which includes the Lehigh Valley.

"While this reduces the health insurance plans available to Pennsylvanians in the individual market, all Pennsylvanians continue to have choices," state Insurance Commissioner Teresa Miller said.

Though the ACA, also known as Obamacare, has brought coverage to millions, its new markets have proven volatile for some of the largest for-profit insurers. UnitedHealth Group -- another Region 6 provider -- and Humana also are exiting ACA markets after posting hundreds of millions of dollars of losses.

Next year will be the ACA's fourth of providing coverage. Even without Aetna and UnitedHealth, five insurers will be offering plans in the Lehigh Valley. In contrast, consumers who live in other parts of the state, including much of the Philadelphia area, will be able to choose from among plans from only one insurer.

"In the Lehigh Valley, you still have robust competition and choice," said Antoinette Kraus, director of the nonprofit Pennsylvania Health Access Network in Philadelphia. "Individuals enrolled in an Aetna plan shouldn't panic."

Their coverage for this year is unaffected, and during open enrollment at the end of the year they'll be able to shop for new plans online, on healthcare.gov, she explained. "They might find other options they like better."

Aetna's about-face on the ACA comes less than a month after the Justice Department sued to block the company's $37 billion purchase of Humana. The DOJ said the merger would harm competition for private Medicare plans and for ACA health plans.

Aetna has denied accusations from Massachusetts Democratic Sen. Elizabeth Warren, among others, that its revised stance on the ACA was payback for the government's role in scuttling the Humana deal.

"The vast majority of [insurers] have experienced continued financial stress within their individual public exchange business," Aetna Chief Executive Officer Mark Bertolini said in a statement. "Providing affordable, high-quality health care options to consumers is not possible without a balanced risk pool."

Aetna said earlier this year that it expected to lose $300 million on its ACA plans.

Noting that Aetna has cited a failure of federal programs meant to mitigate financial risk, Insurance Commissioner Miller added, "It is unfortunate that decisions made by the federal government are negatively affecting Pennsylvania's marketplace, but all of Pennsylvania's marketplace consumers continue to have options and therefore will have access to the federal subsidies only available through the marketplace."

Aetna is exiting Arizona, Florida, Georgia, Illinois, Kentucky, Missouri, North Carolina, Ohio, Pennsylvania, South Carolina and Texas, but will keep selling plans in Iowa, Delaware, Nebraska and Virginia.

Kevin Counihan, who oversees the ACA marketplaces at the federal Centers for Medicare and Medicaid Services, said in a statement that the Obamacare markets remain strong.

"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," Counihan said.

All told, Aetna covered about 838,000 people through the Obamacare exchange in its 15 states as of June 30.

On Aug. 2, the company said it was re-evaluating its approach to the market. At the time, the company said it was scrapping plans to expand into new states in 2017.

"We've got to be able to cover the costs associated with providing the care," Bertolini said in an interview at the time.

The ACA relies on privately run insurers to offer health plans that individuals can buy, often with government subsidies. About 11.1 million people were signed up for Obamacare plans at the end of March.

Aetna announced its decision to withdraw from Pennsylvania's marketplace as the state's Insurance Department is reviewing insurers' proposed rate hikes. Most insurers are pressing for double-digit increases.

"While I remain very concerned about the rates proposed for many health plans for 2017, and the impact these rates may have on consumers," Miller said, "I am also committed to ensuring Pennsylvania remain an attractive place to do business so consumers continue to have choices in this market."

Kraus, of the Pennsylvania Health Access Network, described the rate review process as a "balancing act," in which the insurance commissioner must find just the right "middle ground" between the interests of insurers and those of their customers.

[email protected]

610-820-6130

Bloomberg contributed to this report.

AETNA BOLTS

--What happened? Aetna will exit as an insurer in the Affordable Care Act marketplace in Pennsylvania next year. The company says it is not profitable to operate in the state.

--Who's affected? Aetna covers 31,000 marketplace customers, or 6 percent of the total, in Pennsylvania. Those customers will have to pick plans with new insurers during open enrollment next year.

--What about the Lehigh Valley? UnitedHealth Group, another provider serving the area, also is leaving the marketplace in the Lehigh Valley next year. People who live in the Valley will still have ample choices, as five insurers will continue to operate here next year. Other regions will see fewer choices.

___

(c)2016 The Morning Call (Allentown, Pa.)

Visit The Morning Call (Allentown, Pa.) at www.mcall.com

Distributed by Tribune Content Agency, LLC.