Aetna became the latest health insurer to cast doubt upon its future in the Affordable Care Act's insurance exchanges after it called off a planned expansion Tuesday and suggested it could abandon that market completely.
A departure by Aetna, the nations' third-largest insurer, could further reduce the number of choices for customers and eventually push insurance prices higher. Competition by insurers is a key feature of the exchanges, designed to keep a lid on prices, but several insurers are abandoning them because they are losing enormous amounts of money.
Aetna said Thursday it has been swamped with higher than expected costs, particularly from pricey specialty drugs, and it will take a hard look at its current presence on exchanges in 15 states. When asked by The Associated Press whether that meant the insurer might leave the exchanges entirely or just some markets in 2017, CEO Mark Bertolini said: "All of the above."
Major insurers like UnitedHealth Group Inc. and Humana Inc. have already said they are scaling back their exchange participation in 2017, and several smaller, nonprofit insurance cooperatives are winding down business after losing millions.
The exchanges have helped millions of people gain health coverage, many with assistance from income-based tax credits. But insurers say this relatively small slice of their business has led to large losses because claims have been higher than expected and they are getting less government help than they thought, among other issues.
Blue Cross-Blue Shield insurer Anthem Inc. recently reported a surprising loss from its exchange business.
Aetna said Tuesday it now expects to lose $300 million this year from individual coverage it sells on the exchanges, or triple what it lost last year. Earlier this year, Aetna had said it hoped to break even in 2016.
The insurer covers about 838,000 people and got hit with higher pharmaceutical costs than it expected. Bertolini told analysts Tuesday that a federal risk adjustment program designed to assist insurers that take on high-cost patients hasn't helped with this expense.
"These people need this care, and it's appropriate that they get it, but it's really about how the system works," he said.
Despite the losses and concerns voiced by insurers, federal regulators remain hopeful about the public exchanges. Consumers "will continue to have a robust set of choices" when they return to the exchanges to shop for 2017 coverage, U.S. Department of Health and Human Services spokeswoman Marjorie Connolly said in an email.
She said insurers are adjusting to the exchanges and regulators are working to strengthen them, and she expects that they will "continue to thrive for years ahead as a place where insurers compete for business and consumers have access to a range of affordable coverage options." Aetna beat second-quarter expectations.