Aetna is the third major insurance company to announce significant cutbacks in ACA exchange participation, forcing many consumers to face higher premiums in 2017.
This morning, Aetna announced that in 2017, it will no longer participate in the Affordable Care Act’s (ACA's) public exchanges in two-thirds of the counties where it currently provides insurance on the exchanges. The company, which currently accounts for 8.4% of the $777.5-billion Health and Medical Insurance industry, will only participate in exchanges in Delaware, Iowa, Nebraska and Virginia. Aetna is the third major insurance company to announce cutbacks to their public exchange participation; UnitedHealth Group (market share: 21.3%) announced a rollback in April, while Humana (market share: 7.1%) announced its cutbacks last month.
These reductions are likely the result of the elimination of the ACA’s Cost Sharing Reduction (CSR) program, which lowered deductibles, co-payments and co-insurance. Even with this program, Aetna had reported a loss from its insurance exchange coverage. Without the CSR, insurance companies will likely experience further losses. The ACA exchanges are mostly attractive to low-income individuals who qualify for subsidies and people with preexisting conditions; therefore, subsidies are the main funding for the exchanges. Without the CSR, the exchanges will likely become less financially viable for insurers.
