Humana to exit Virginia, Alabama ACA markets
- Humana is exiting at least two ACA marketplaces next year: Alabama and Virginia, Bloomberg reported.
- Humana in its Q1 2016 fiscal year earnings noted its ACA coverage enrollees dropped 21% to 875,700 customers, compared with 1.1 million during the same quarter last year.
- In its report, the insurer stated it is in the process of "finalizing plans for its ACA-compliant individual commercial medical market offering in 2017." It added changes may include "certain statewide market and product exists both on and off the exchange, service area reductions and pricing commensurate with anticipated levels of risk by state."
- Overall, the company experienced a 46% decrease in profits, Forbes reported.
Similar to UnitedHealth, Humana doesn't have a large stake in the ACA markets, enrollment-wise. Out of the 12.7 million individuals that picked up health coverage through an ACA plan, Humana provides coverage for 554,300 individuals as of late March, Bloomberg noted.
Humana has far fewer ACA markets (15) than UnitedHealth operated in this year (34). UnitedHealth made waves earlier last month when it announced it would exit at least 26 ACA state markets next year.
Some of the major insurers overlap in markets. Humana's decision to exit the Alabama market means Blue Cross and Blue Shield of Alabama as the state's only choice in the state's ACA market.
Humana, due to its pending merger with Aetna, did not host a call with analysts thus giving no fiscal predictions for its current ACA market activity.
While Humana and UnitedHealth might be exiting the markets, some insurers such as Centene have expressed recent optimism over the state markets.
Some stakeholders are OK with competition for individual coverage: Hospitals. This week, Tenet Healthcare SVP of public affairs Daniel Waldmann told Reuters, the hospital system is bullish on the exchanges after seeing a surge in hospital business from newly insured patients under the ACA.
If the pending Humana/Aetna merger is completed, Medicare and Medicaid will comprise about 56% of the combined company’s roughly $115 billion in operating revenue. Humana stated it expects the Aetna/Humana merger to close in the second half of this year.
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