- Aetna CEO Mark Bertolini late Monday announced the insurer would narrow its participation in the individual public exchange.
- The carrier will reduce its participation from 778 to 242 counties next year, maintaining an on-exchange presence in Delaware, Iowa, Nebraska and Virginia.
- The company will continue to offer off-exchange plans for most of the counties it offered plans on the ACA market in 2016.
While comments from its Q2 2016 earnings reversed its previous hint at ACA market expansion, Bertolini doubled down on the reversal with the announcement to leave about 69% of the ACA markets it participated in this year. He lamented, "As a strong supporter of public exchanges as a means to meet the needs of the uninsured, we regret having to make this decision."
“Following a thorough business review and in light of a second-quarter pretax loss of $200 million and total pretax losses of more than $430 million since January 2014 in our individual products, we have decided to reduce our individual public exchange presence in 2017, which will limit our financial exposure moving forward," Bertolini stated in a prepared statement.
The news comes as the nation's big insurers are rethinking their individual market strategies overall. Some, like UnitedHealth, are deciding to largely get out of the markets. Others, like Cigna, are trying to get into some exchange markets they see as being profitable, such as the Chicago market.
What's stunning about the reversal is that Aetna, as alluded to in Bertolini's statement, was a proponent for the ACA markets. Still, the realities of the still nascent market (sicker patients than expected, employers not off loading employee coverage to the market, insurers pricing plans too low, etc.) has forced insurers to draw up exit strategies or raise rates. Politico Pulse on Monday highlighted Charles Gaba's findings that the average rate request for insurers in the ACA exchange is 24%.
Recent CMS communiques have hinted at rules coming down the pipeline to help strengthen the market. This could see the light of reality in the form of changes to the risk adjustment program. While this change could help insurers from a financial standpoint, "young invincible" engagement and enrollment are also needed to help the market stabilize.