In a move that will reduce choices for customers and could drive up prices, health insurance giant Aetna said that it will cut its participation in health care exchanges set up by President Barack Obama’s health care reforms.
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The company will reduce the number of counties it serves on the exchanges from 778 to 242 for the 2017 plan year — a cut of about 69 percent.
The shift means Aetna will maintain a presence in only four states: Delaware, Iowa, Nebraska and Virginia. It is on exchanges in 15 states this year, according to The Associated Press. Next year, some states, including Alaska and Oklahoma, will be left with only a single provider selling coverage to individuals.
“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,” Aetna CEO Mark Bertolini said in a statement, “we have decided to reduce our individual public exchange presence in 2017, which will limit our financial exposure.”
“Providing affordable, high-quality health care options to consumers is not possible without a balanced risk pool,” Bertolini said, before noting that the company saw a recent spike of “individuals in need of high-cost care.”
According to The Associated Press, Aetna was covering about 838,000 people on the individual exchanges at the end of the second quarter of this year. In the statement, Aetna said it would continue to offer off-exchange products in 2017 to individuals “in the vast majority of counties” where it offered coverage via public exchanges this year.
Aetna’s decision follows similar reduction plans announced by UnitedHealth and Humana, according to the AP. In the past few years, more than a dozen nonprofit insurance co-ops have shut down.
The pullback is concerning because competition on the exchanges is meant to drive down costs, the AP reported. Many insurers have announced price hikes of about 10 percent for next year.
Federal ACA marketplace CEO Kevin Counihan responded to the cutbacks in a statement, saying, “Aetna’s decision to alter its marketplace participation does not change the fundamental fact that the health insurance marketplace will continue to bring quality coverage to millions of Americans.”
“It’s no surprise that companies are adapting at different rates to a market where they compete for business on cost and quality rather than by denying coverage to people with pre-existing conditions,” he said, adding that the marketplace has “helped America reach the lowest uninsured rate on record.”
The Associated Press contributed to this report.