Major health insurance provider Aetna announced Wednesday that they will be completely pulling out of the ObamaCare marketplace exchange program beginning in 2018. The healthcare insurance provider has suffered a loss of at least $700 million in the last two years and financial predictions for 2017 include a $200 million loss so far.
Tom Price, the Secretary of Health and Human Services, attributes this as a sign of the marketplace instability caused by ObamaCare.
“Aetna’s decision to completely withdraw from the ObamaCare exchanges adds to the mountain of evidence that ObamaCare has failed the American people. Repealing and replacing it with patient-centered solutions that stabilize the marketplace to bring down costs and increase choices is the only solution,” Price said.
Aetna’s exit has been a gradual one. In 2016, they said they would limit their marketplace coverage to only 15 states. At the beginning of 2017, claiming financial losses, they cut their offerings back to only four states—Virginia, Iowa, Delaware, and Nebraska.
Last month the company announced it would no longer provide marketplace coverage in Virginia for 2018. Early in May, they declared they would not be participating in the state exchanges in Iowa either. Now, this new initiative cuts back on their involvement in Delaware and Nebraska leaving them completely out of the exchange program.
“Our individual commercial products lost nearly $700 million between 2014 and 2016, and are projected to lose more than $200 million in 2017 despite a significant reduction in membership. Those losses are the result of marketplace structural issues that have led to co-op failures and carrier exits, and subsequent risk pool deterioration,” the company said Wednesday.
It’s the latest in the string of insurers to exit the marketplace. Insurance companies are not faring well under ObamaCare.
“The insurance companies are fleeing. It’s been a catastrophe … It’s essentially dead. If we don’t pay lots of ransom money over to the insurance companies, it would die immediately,” President Trump said last week on the passage of the American Health Care Act.
When Aetna pulled out of Iowa earlier this month, Medica was also threatening to leave the state.
“Without swift action by the state or Congress to provide stability to Iowa’s individual insurance market, Medica will not be able to serve the citizens of Iowa in the manner and breadth that we do today. We are examining the potential of limited offerings, but our ability to stay in the Iowa insurance market in any capacity is in question at this point,” the company said in a statement.
There were only three main insurance companies in the Iowa marketplace. The third is Wellmark Blue Cross and Blue Shield. With those two companies pulling out, BCBS will be only insurance provider for Iowans. CNN Money reported that even they will be pulling out in 2018 as well.
And Iowa isn’t alone either, Fox News reports. For 2018, five states will only have one provider available through the healthcare marketplace. Those states are Alaska, Alabama, Oklahoma, South Carolina, and Wyoming. Fox News reports that the one provider option affects 32% of the counties nationwide.
Molina Healthcare, one of the top insurers under ObamaCare, announced it would be leaving the exchange program if Congress didn’t pass legislation allowing insurers to be reimbursed for providing care to low-income patients. Humana has already completely pulled out of the individual market 2018 and other companies are pulling out as well. The ones that remain are announcing huge rate spikes.
The reasons are simple–patients are running up high bills and the premiums can’t cover it. With more people being insured than ever and the ban of discriminating against pre-existing conditions, it’s a losing game economically. Also, they cite, the political instability of healthcare coverage coming out of Washington creates instability in the market. Insurers are concerned about the regulations and cost increases they will face. It’s better to get out of the game altogether.
A repeal and replace plan to ObamaCare passed the House last Thursday in a narrow 213-217 vote. Not a single Democrat voted for the bill. The American Health Care Act overrides a lot of the financial burden that ObamaCare contained, including slashing funding for Medicaid expansion and penalties for not buying healthcare. It also allows states to opt out of the pre-existing conditions clause. But even the American Health Care Act needs improvement. The American Medical Association said it would still be ineffective.
“The bill passed by the House today will result in millions of Americans losing access to quality, affordable health insurance and those with pre-existing health conditions face the possibility of going back to the time when insurers could charge them premiums that made access to coverage out of the question,” AMA president Andrew W. Gurman said.
The bill now rests with the Senate and is likely to undergo long debate and amendment. But, House Speaker Paul Ryan is optimistic that the bill will pass “in a month or two.”
That is if there are any insurance companies left to work with.