Under the Affordable Care Act, employers staffing 50 or more full-time equivalent workers must provide comprehensive and economical health care coverage. Even if their company offers affordable insurance by federal standards, employees have the option to search the Obamacare marketplace for even cheaper options. Waiving their employer-provided plan is their right, but people must sign up for health care one way or another.
While the marketplace varies from state to state, people have become accustomed to seeing the large-name insurers included in their list to choose from. Moving forward, however, that breakdown of choices will witness serious changes. Triton Benefits has a closer look:
Aetna and Humana are the two newest insurers to reduce their marketplace participation since UnitedHealthcare started the trend.UnitedHealthcare led the charge
In April, UnitedHealthcare – the nation's largest insurer – released its first quarter earnings announcement. Included in this notice was company data showing $430 million in losses from its participation in the exchanges in 2015 and a projected loss of $650 million in 2016, according to The Washington Post. The company originally operated in 34 states but will reduce its coverage to include just a handful, including Nevada and Virginia, in 2017. Executives have also stated a full departure from Obamacare may be possible in the future. At the time of their decision, UnitedHealthcare was the only large carrier to take drastic action, citing the greater expenses associated with patients' purchasing coverage through the marketplace.
That's no longer the case, however. Both Humana and Aetna – the nation's second and third largest insurers – have also announced plans to reduce their participation in Obamacare in 2017. This news comes after the latter lost $200 million in ACA pre-taxes, according to its second-quarter earnings report, and one month after the U.S. Department of Justice sued to block Aetna's acquisition of Humana, MSN Money stated.
"Aetna will only operate in only four states starting in 2017."
Aetna cuts participation by 70 percent
Similar to UnitedHealthcare, Aetna reduced its marketplace footprint by a large figure: 70 percent, to be exact. Instead of operating in 15 states – as it did in 2016 – the insurer will only be available in four states, including Delaware, Iowa, Nebraska and Virginia, starting in 2017. Additionally, it will only offer plans in 242 counties, down from 780 in 2016.
Humana will cut its coverage from 19 states to 11 in 2017. Both organizations cited rising costs associated with higher medical expenses of exchange participants as the reason for their exits. As a result, hundreds of thousands of Obamacare users will no longer have access to plans from the nation's largest insurers in the upcoming year.
Aetna's chairman and CEO, Mark Bertolini, doesn't know what the future holds for the relationship between his company and Obamacare exchanges but said Aetna is still committed to providing accessible coverage.
"We will continue to evaluate our participation in individual public exchanges while gaining additional insight from the counties where we will maintain our presence, and may expand our footprint in the future should there be meaningful exchange-related policy improvements," Bertolini said in a statement.
Effects on Obamacare users
Despite UnitedHealthcare, Aetna and Humana leaving the exchange in a number of states, Obamacare is still dedicated to providing affordable options for its members. Exchange participants will, most likely, still have options to choose from, although those selections may be limited. For other insurers, the amount of competition is greatly reduced with the departure of big-name providers.
Consumers will probably feel the effects of this change. Those states and counties with only one or two insurers could see higher premiums, according to Kaiser Health News.
Aetna's departure from Obamacare marketplaces is the latest in a string of exits including UnitedHealthcare and Humana. This can be concerning for consumers who, depending on their state, may see more limited options in terms of health care coverage. Despite these large reductions in coverage from the nation's three largest insurers, however, Obamacare is still dedicated to providing affordable and accessible health plans to people across the country. The true impact of the withdrawals will be more closely examined when marketplace open enrollment begins November 1.