$340 Million Loss: Aetna Backs Away from Obamacare
The number three health insurance company in the United States is pulling back on Obamacare Health insurance plans for 2017.
Due to a consistent financial loss from the plans, Aetna has decided to sell individual insurance on government-run online marketplaces in only four states starting in 2017.
This is a major decrease from their current 15 states.
Aetna is currently trying to buy Humana, while battling a U.S. lawsuit that is trying to block the $34 billion bill.
Aetna is not alone. Other's like United Health are making the same decision to opt out of the exchange in part or whole.
Insurers were expected to make a profit on the exchanges, however the numbers proved differently when only 11 million people signed up through the government health program. It's only half the amount expected by federal projections.
Insurance companies say the rules must change to make the exchanges sustainable.
According to Larry Levitt, healthcare economist at the Kaiser Family Foundation, if enrollment stagnates, small technical fixes will not solve the problem.
"More healthy people need to be encouraged to sign up," Levitt said.
Aetna has lost $430 million since the sale in 2014.
Kevin Counihan, Chief Executive of the U.S. government-run individual marketplace, says the effect makes sense regarding the exchanges and insurers.
"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 preexisting conditions," he said.
Aetna plant to continue selling on the exchanges in Delaware, Iowa, Nebraska and Virginia in 2017 as well as individual plans that meet the law's requirements.
