Obamacare tipping point? Aetna to scale back coverage in most marketplaces

Aetna, one of the largest health insurance companies in the country, announced that it will scale back its participation in the Obamacare marketplaces, dropping its coverage from 15 states to four.

Depending on what states they intend to leave, there may be several states that will be left with only a handful of companies willing to do business on the state exchanges.  That will further drive up costs, leading to the long predicted death spiral for Obamacare.

The Hill:

The move comes as a range of insurers have complained of financial losses on the ObamaCare marketplaces. 

The company said it will scale back from participating in 15 states this year to just four states in 2017. 

“As a strong supporter of public exchanges as a means to meet the needs of the uninsured, we regret having to make this decision,” Aetna CEO Mark Bertolini said in a statement, citing a loss of $200 million in the second quarter.

The Obama administration argued the move is not a sign that the ObamaCare marketplaces are in trouble. 

“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 next year and every year after that,” said the administration’s ObamaCare marketplace CEO, Kevin Counihan.

The move comes on the heels of pullbacks from other major insurers, including UnitedHealthcare and Humana. 

The insurers have raised concerns about the sustainability of the ObamaCare marketplaces. 

The mix of ObamaCare enrollees has been smaller and sicker than expected. Some experts say that insurers also set their premiums too low. Premiums are expected to rise more sharply in 2017, which could help insurers address some of the losses. 

In the case of Aetna, however, ObamaCare supporters argue that the announcement is not a sign of broader problems with the law, but instead a direct result of the administration suing to block the company’s proposed merger with Humana. 

Backers argue that the Department of Justice’s announcement in July that it is suing to block the merger is the real cause of Aetna’s negative shift in tone on the health care law. 

Sen. Elizabeth Warren (D-Mass.) said last week that Aetna was using its posturing about ObamaCare as a “bargaining chip” for its merger talks. 

“The health of the American people should not be used as bargaining chips to force the government to bend to one giant company’s will,” Warren said. 

The left is in denial.  Leftists are saying that the only reason a company that loses $200 million in a single quarter would want to leave the marketplace is because it's mad at the Obama administration about trying to stop a merger.  It has nothing to do with a potential $800-million yearly loss.  Don't all companies base their decisions on the same thing liberals do?  Emotion, revenge, conspiracy?

If there is a connection between the challenged merger and Aetna pulling out of state exchanges, it has more to do with how much more competitive Aetna could be if the merger went through.  But this sort of nuance is lost on leftists like Senator Warren, who views any attempt by a business to make money as evil.

In states where there are only two or three companies vying for customers, rates will rise precipitously.  This means fewer sign-ups and increased costs for those insurers who are left.  Eventually, some states will be left with no companies doing business at all, which could then lead to the rapid meltdown of the rest of the marketplace.

Aetna, one of the largest health insurance companies in the country, announced that it will scale back its participation in the Obamacare marketplaces, dropping its coverage from 15 states to four.

Depending on what states they intend to leave, there may be several states that will be left with only a handful of companies willing to do business on the state exchanges.  That will further drive up costs, leading to the long predicted death spiral for Obamacare.

The Hill:

The move comes as a range of insurers have complained of financial losses on the ObamaCare marketplaces. 

The company said it will scale back from participating in 15 states this year to just four states in 2017. 

“As a strong supporter of public exchanges as a means to meet the needs of the uninsured, we regret having to make this decision,” Aetna CEO Mark Bertolini said in a statement, citing a loss of $200 million in the second quarter.

The Obama administration argued the move is not a sign that the ObamaCare marketplaces are in trouble. 

“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 next year and every year after that,” said the administration’s ObamaCare marketplace CEO, Kevin Counihan.

The move comes on the heels of pullbacks from other major insurers, including UnitedHealthcare and Humana. 

The insurers have raised concerns about the sustainability of the ObamaCare marketplaces. 

The mix of ObamaCare enrollees has been smaller and sicker than expected. Some experts say that insurers also set their premiums too low. Premiums are expected to rise more sharply in 2017, which could help insurers address some of the losses. 

In the case of Aetna, however, ObamaCare supporters argue that the announcement is not a sign of broader problems with the law, but instead a direct result of the administration suing to block the company’s proposed merger with Humana. 

Backers argue that the Department of Justice’s announcement in July that it is suing to block the merger is the real cause of Aetna’s negative shift in tone on the health care law. 

Sen. Elizabeth Warren (D-Mass.) said last week that Aetna was using its posturing about ObamaCare as a “bargaining chip” for its merger talks. 

“The health of the American people should not be used as bargaining chips to force the government to bend to one giant company’s will,” Warren said. 

The left is in denial.  Leftists are saying that the only reason a company that loses $200 million in a single quarter would want to leave the marketplace is because it's mad at the Obama administration about trying to stop a merger.  It has nothing to do with a potential $800-million yearly loss.  Don't all companies base their decisions on the same thing liberals do?  Emotion, revenge, conspiracy?

If there is a connection between the challenged merger and Aetna pulling out of state exchanges, it has more to do with how much more competitive Aetna could be if the merger went through.  But this sort of nuance is lost on leftists like Senator Warren, who views any attempt by a business to make money as evil.

In states where there are only two or three companies vying for customers, rates will rise precipitously.  This means fewer sign-ups and increased costs for those insurers who are left.  Eventually, some states will be left with no companies doing business at all, which could then lead to the rapid meltdown of the rest of the marketplace.