Health care company Aetna says it's pulling its plans off the individual insurance exchanges in Georgia and 10 other states next year, making it the latest major insurer to deal a blow to President Obama’s signature health care law.
Nationwide, the company says it will shrink its presence from 778 counties to 242 next year, and will continue operating exchange plans in only four states: Nebraska, Virginia, Iowa and Vermont. In Georgia this year, Aetna operated plans in 67 counties.
In a statement, Aetna CEO Mark Bertolini says the company is losing too much money on the exchanges created under the Affordable Care Act, or Obamacare. He says pretax losses in the second quarter of this year hit $200 million, while total pretax losses since January 2014 reached $430 million in the company’s individual insurance products.
Bertolini says the company remains committed to “providing affordable, high-quality health care options to consumers,” but that it isn’t possible without a more balanced risk pool, meaning more young, healthy individuals to balance out those who may be older or sicker, and thus more expensive.
“In the second quarter we saw individuals in need of high-cost care represent an even larger share of our on-exchange population,” Bertolini said. “This population dynamic, coupled with the current inadequate risk adjustment mechanism, results in substantial upward pressure on premiums and creates significant sustainability concerns.”
The move is a complete reversal of Aetna's stance in May, when it said it had "no plans" to withdraw from the Georgia exchange. A spokesman for the company strongly denied the timing of the decision had anything to with the U.S. Department of Justice’s recent suit to block the company’s merger with insurer Humana.
Aetna’s decision to pull out of the exchange means Georgians who enroll in marketplace plans next year will have fewer choices when it comes to choosing a health coverage plan. Residents of some counties may find they have no choice among providers at all.
Aetna is the second major insurer to pull out of Georgia’s marketplace, after UnitedHealthcare announced plans earlier this year to pull all of its ACA plans. Humana has also said it plans to drop its presence from more than 1300 counties nationally, including some in Georgia, to around 150.
Federal research shows people on the exchanges tend to choose plans based on how little they can pay in monthly premiums.
Cindy Zeldin, the executive director of the health policy group Georgians for a Healthy Future, says Georgians have shown to be no different, and that a big way people find those savings is by switching plans each year.
“Last year many consumers were able to save money by shopping around, so that will be important for this open enrollment period, we believe, too,” Zeldin says.
Professor Bill Custer, an insurance expert at Georgia State University, says more Georgians are likely to switch their plans during this open enrollment season because their options have been reduced.
“It will affect choice,” Custer says. “And it will mean that a significant portion of people who have coverage through the exchange are going to have to change plans.”
Custer says dwindling choices means less competition among insurers, which the ACA envisioned as a major tool to control costs.
The professor says the metro Atlanta area will still have some competition among carriers, but only one company -- Blue Cross Blue Shield -- will offer plans in all 159 Georgia counties.