Thread: Aetna's exit deals blow to Obamacare, patients

Aetna's exit deals blow to Obamacare, patients

7:26 p.m. EDT August 16, 2016



Health insurer Aetna announced late Monday that it is dropping Obamacare insurance in 69% of the counties and 11 of 15 states where it currently offers plans.

The third largest health insurance company becomes the latest to pull back from the plans offered under the Affordable Care Act (ACA) as it cites heavy losses.

Here's what that means for patients, insurers, the ACA and the company's fight with the government over its effort to acquire Humana.

What does this mean for patients?

The cuts affect 20% of Aetna's 838,000 Obamacare participants, covering people in 536 counties, according to a Securities and Exchange Commission filing.

The insurer is ending its Obamacare plans in 11 states: Arizona, Florida, Georgia, Illinois, Kentucky, Missouri, North Carolina, Ohio, Pennsylvania, South Carolina and Texas. Participants will be forced to sign up for other Obamacare plans or purchase individual insurance outside of the exchanges once open enrollment begins later this year. Aetna’s Obamacare members in Delaware, Iowa, Nebraska and Virginia will be unaffected.

Patients may also lose their preferred doctors and hospitals if they sign up for plans that don't include those providers in their network coverage. People in rural areas are most affected.

Will this affect my monthly premium?

Experts are already forecasting that the premium for an average plan – the lowest-cost medium-benefits option for a 40-year-old nonsmoker - is expected to rise by 9% in 2017 to a monthly payment of $281, according to the Kaiser Family Foundation. That increase could potentially deter some people from signing up.

But most Obamacare plan members will continue to receive tax credit subsidies to help pay for their insurance. The U.S. Department of Health and Human Services (HHS) reported that 85% of Obamacare plan members received tax credit subsidies and paid only $4 extra per month in 2016.

The biggest question for insurers is whether premium increases are enough to offset losses and keep insurers competitive.

Why is Aetna exiting a majority of its Obamacare plans?

The insurer blamed heavy losses for the move. The company suggested that too many sick people are buying plans, not enough healthy people are paying premiums to cover the expenses and the government isn't making policy changes to fix it.

But HHS says that it has implemented new regulations to make the exchanges more appealing to insurers. The agency says new rules make it more difficult for Americans to abuse the system by buying insurance when they need it and dropping it when they don't, which is illegal and extremely unprofitable for insurers.

"They did respond to some degree," but insurers are "not satisfied" with the moves, said Marianne Udow-Phillips, director of the Center for Healthcare Research & Transformation at the University of Michigan, in an interview.

Is what Aetna did legal?

Yes. Insurers are not legally obligated to offer plans through the Affordable Care Act exchanges.

Are others doing it?

Indeed. UnitedHealth Group, the nation's largest insurer, recently ended most of its Obamacare exchanges plans for similar reasons, though its ACA footprint was much smaller. In 2016, states had an average of 6.5 ACA options, down from 6.9 in 2015, according to the Kaiser.

Before Aetna's withdrawal, Kaiser was already projecting a drop to 5.8 ACA insurers per state in 2017.

Who's happy about this?

Conservative advocates who want to demolish Obamacare and replace it.

"Aetna’s withdrawal from nearly a dozen exchanges is another sign that ObamaCare is unsustainable," FreedomWorks CEO Adam Brandon said in a statement.

"Conservatives must demand that Republicans begin to make ObamaCare an issue in this election and promote patient-centered solutions that will restore the American health care system."

But liberals who believe Obamacare doesn't go far enough may use this decision to make a point, too.

Udow-Phillips speculated that as insurers withdraw from Obamacare, it could "spark more support for the public option" — meaning, the argument that the best route to ensuring Americans get coverage is to have the government pay for it directly.

Does this mean fewer people will get Obamacare insurance?

Not necessarily. In fact, Kaiser projected an increase in Obamacare plan enrollees from 12.7 million at the end of open enrollment in 2016 to 16.3 million "if all states improved to at least the average of the 10 best-performing states."

Still, it will be foreboding if more insurers follow suit.

"This is concerning for the stability of the individual marketplace in many places," Udow-Phillips said of Aetna's decision.

Is this payback for the Obama administration's effort to block Aetna's acquisition of Humana?

It depends on whom you ask. Aetna would never say so.

But when the U.S. Justice Department filed a lawsuit seeking to block the merger in July, Aetna warned that the lawsuit could undermine its Obamacare plans.

Ironically, the onset of Obamacare helped spark a wave of consolidation in the insurance business.

Could this decision affect the outcome of that fight?

Don't expect tranquility anytime soon.

"I don't think it will sway the Justice Department on their anti-trust concerns," Udow-Phillips said. And "I doubt it would sway the courts."

http://www.usatoday.com/story/money/...nges/88825798/

Aetna changes add consumer pain as health care costs to rise in 2017

USA TODAY 8:02 a.m. EDT August 17, 2016



The 3rd largest health insurance company in the US is pulling its plans from 70% of the Obamacare insurance exchanges it participates in. Time

Aetna's decision to leave the Affordable Care Act exchanges in 11 states follows dozens of similar decisions by large and small insurers across the country, moves that dramatically reduced competition in some states and contributed to increased premiums.

Such a move was inevitable now that insurers have to compete on price instead of which company can attract the healthiest customers, health care experts say.

“There’s very intense price competition now,” says Sara Collins, vice president of health care coverage and access at the Commonwealth Fund. “The market is now functioning in a more typical way, so consequently some are going to do well and others are not.”

Aetna, in fact, only had the lowest price 16% of the time, according to an Urban Institute report, while some other insurers, including those more experienced with Medicaid managed care plans, tended to have lower prices. Blue Cross plans had the lowest price 42% of the time.

Prices across insurance carriers are very likely to make a big jump for 2017, records show.

Insurers are seeking approval for average national premium increases of 24%, according to calculations by Charles Gaba of ACAsignups.net. What insurers request and states approve is often quite different, but experts say it will be more difficult for states to drive harder bargains with insurers given the losses many are facing with ACA plans.

Indeed, in the five states that have already signed off on insurers' premiums, the average increase was 17%, Gaba says. The 2016 increase was 10%.

The consolidation of insurers has a very small effect on the vast majority of people who buy insurance on the exchanges, as more than 80% get subsidies to help them afford their insurance. But it could hamper efforts to attract those who remain uninsured and aren't eligible for much or any financial assistance.

Most uninsured people don't realize they can receive subsidies or would be able to get Medicaid if their state expanded the program, Commonwealth Fund research shows.

Still, consolidation creates huge headaches for some consumers. For many in Illinois, Aetna’s announcement was a double whammy.

Jordan Wishner, a Chicago area broker who owns the Health Insurance Shoppe, was already reeling personally and professionally after Illinois last month ordered the insurance co-op Land of Lincoln Health to shut down. Aetna is the next most affordable plan for his family of four so he will switch to Aetna and then another insurer for 2017. Wishner has 300 clients who are among the nearly 50,000 residents who must find new plans. Those who already met their deductibles have to start with a new deductible and pay higher premiums.

“This is not affordable for consumers,” he said.

While the success of the insurance exchanges doesn't depend on the presence of any one large carrier such as Aetna or United Healthcare — which is gradually leaving many markets — the Robert Wood Johnson Foundation’s Katherine Hempstead says the exits should accelerate efforts by regulators to stabilize the system so both consumers and insurers find it affordable.

Last Friday, Kevin Counihan, CEO of Healthcare.gov, said the Department of Health and Human Services is considering bolstering programs to help insurers manage the risk of treating their new customers. Healthcare.gov handles insurance sales for 38 states that didn’t set up their own.

Aetna may return to the health care exchanges, since it will still sell individual policies in the 11 states where it's leaving the exchanges, said company spokesman T.J. Crawford. That would depend on potential changes in the ACA rules, he said.

The company may also be looking for leverage with the federal government. Its announcement last week that it was mulling the move might be an attempt to use it as a "bargaining chip" related to the Justice Department's refusal to support its merger with Humana, said Sen. Elizabeth Warren, D-Mass.

Crawford denied that, saying the move was based on losses.

While Aetna’s announcement isn’t critical to the future of the exchanges, it is “pointing to some issues that it would be good to address,” says Hempstead.

Among the solutions being discussed:

• Helping more consumers. Increasing subsidies to those making more than 250% of the federal poverty limit — or $50,400 for a family of three — would help more consumers afford their plans and attract more of the uninsured. The impact of premium increases on low-income consumers is negligible and only amounted to about $4 a month for those receiving the highest subsidies this year. But those earning the smallest subsidies or none at all are really feeling the pinch.

• Subsidizing insurers more — and longer. Insurance companies and employers pay fees that help reimburse insurers that face unusually high claims, but that “reinsurance” program is slated to expire after this year. That’s one of the reasons premiums are making such a big jump for 2017. Many have called for that program to be extended. HHS is also considering including prescription drug use in the risk adjustment formula that determines how much money insurers get to compensate them for having unhealthy customers, says Hempstead.

Having states help insurers, too. Alaskans faced such a steep premium increase for 2017 with their one exchange insurer that the state passed a law that authorized pumping $55 million into the system to further subsidize the company, which then dramatically dropped its planned premium increase.

Counihan suggested Friday that more states could pursue similar programs. In North Carolina, where Blue Cross Blue Shield suggested in February that it might leave the exchange, United Healthcare announced in April that it is dropping its ACA exchange plans. The state's Democratic insurance commissioner, George Goodwin, wrote to HHS Secretary Sylvia Burwell in February lamenting that if current trends continued, "some North Carolinians will have no access to health insurance at all" because there was only one insurer in some counties.

• Cutting coverage requirements. All ACA plans must include 10 benefits that the law deems “essential,” but many healthy young consumers want cheaper, more bare-bones plans. Some even buy these catastrophic types of plans that don’t meet the ACA and pay the penalties for not having sufficient coverage.

Hempstead remains hopeful about the future of the exchanges. Aetna, after all, left the door open to returning next year. And there’s precedent in the early challenges faced by regulators and insurers with the Medicare Part D prescription drug plans and Medicare Advantage managed care plans — and the federal solutions that encouraged insurers to participate.

“Everyone agrees improvements could be made. It’s just a matter of how well and how soon they are made,” says Hempstead. “There are just too many people in this market for it not to be preserved.”

http://www.usatoday.com/story/news/p...sure/88829392/