Aetna, one of the United States’ largestHHhh, announced Monday that it will dramatically reduce its presence in health care exchanges across the country. After the cutbacks, the company will sell insurance on public marketplaces in just four states.
The online healthcare exchanges, meant to make it easier for customers to buy insurance with help from public subsidies, were a centerpiece of the Affordable Care Act. That law, passed in 2010, is one of President Obama’s signature achievements.
Coverage first became available on the marketplaces in 2013. Although the exchanges’ initial rollout on the Department of Health and Human Services’ Healthcare.gov platform was rocky, 11 million Americans are currently covered by health insurance purchased through the health care exchanges. Of that 11 million, 85 percent receive public subsidies in the form of tax credits that help them afford the insurance.
However, insurers have complained that low-income individuals with significant health problems are buying the cheapest plans offered on the exchanges and then incurring high medical costs that make it impossible for insurers to turn a profit.
Under the 2010 health care law, insurers are no longer allowed to reject customers with pre-existing medical conditions. This has made it harder for insurers to control costs; in its announcement that it was withdrawing from many exchanges, Aetna noted that “individuals in need of high-cost care” made up a disproportionate number of its exchange customers.
With Monday’s announcement, Aetna will withdraw from two-thirds of the 778 counties where it now offers coverage on the health care exchanges. The company noted that it will remain active in the markets in Delaware, Iowa, Nebraska, and Virginia.
Aetna’s announcement comes after several other large insurers, including UnitedHealth and Humana, announced similar plans to reduce their offerings on the exchange. As in those earlier instances, the Obama administration reacted angrily to Monday’s announcement.
According to The New York Times, administration officials suggested Aetna’s decision was motivated by revenge after the Department of Justice filed suit last months to block Aetna’s proposed acquisition of Humana on antitrust grounds.
Senator Elizabeth Warren (D-Mass.) made a similar argument, accusing Aetna of using the health of the American people as a “bargaining chip” in the antitrust dispute.