Aetna pulling out of ACA

[Fermion]

Another big player pulls out of ACA

My question is what this might do the silver plan subsidies? They are calculated on the 2nd lowest plan, but if enough players pull out, the most expensive plan will be the 2nd lowest.

Could our subsidized rates actually go down in some areas as the lower priced plans who are not making money on the exchange pull out?

 

[MichaelB]

The thread title is misleading. Aetna is not pulling out of the ACA. In their own words "Aetna to Narrow Individual Public Exchange Participation". Here's their announcement News Releases - Investor Info | Aetna

They are not the lowest price players in the market exchanges where they participate, so their announcement will probably reduce competition but should have little impact on the subsidies.

 

[easysurfer]

The thread title is misleading. Aetna is not pulling out of the ACA. In their own words "Aetna to Narrow Individual Public Exchange Participation". Here's their announcement News Releases - Investor Info | Aetna

They are not the lowest price players in the market exchanges where they participate, so their announcement will probably reduce competition but should have little impact on the subsidies.

Looks like Aetna is doing the "Pork and Beans" approach. Yes, when you open up a can, there is pork inside. That one sliver

 

[EastWest Gal]

I assume it's dropping participation in the national exchange. We hunt for health insurance again this fall. But so far I haven't used it yet anyway.


Sent from my iPhone using Early Retirement Forum

 

[MichaelB]

I assume it's dropping participation in the national exchange. We hunt for health insurance again this fall. But so far I haven't used it yet anyway.

It looks like Aetna is cancelling it's expansion plans and leaving markets where they are marginal participants. They definitely will continue to offer insurance where they currently compete.

Aetna will reduce its individual public exchange participation from 778 to 242 counties for the 2017 plan year, maintaining an on-exchange presence in Delaware, Iowa, Nebraska and Virginia. The company will continue to offer an off-exchange individual product option for 2017 to consumers in the vast majority of counties where it offered individual public exchange products in 2016.

 

[Fermion]

Ok, you can say they are not pulling out, but if I said your stocks had dropped in value by 70%, would you call it a crash or just a correction?

 

[InTheSticks]

I have Coventry. I assume since that Aetna owns Coventry, they will be pulling out of Missouri (my state). Correct?

 

[MBSC]

I have Coventry. I assume since that Aetna owns Coventry, they will be pulling out of Missouri (my state). Correct?

Aetna/Coventry is leaving the exchanges in Arizona, Florida, Georgia, Illinois, kentucky, Missouri, North Carolina, Ohio, Pennsylvania, South Carolina, and Texas. They will still offer off-exchange plans in most of these areas.

 

[nuke_diver]

Educate me a bit here. If a HC pulls out of ACA does that mean they won't offer any insurance at all or not through the exchange only? Are they still bound by the same requirements (ie no refusal for preexisting conditions) or can they dispense with that inconvenience (on their part)? I saw the news and it said Aetna was getting out because the costs were much higher than expected (more sick people which means you actually have to pay the insurance rather than just taking in premiums for people that don't get sick).

Trying to understand the impact of a potential repeal of ACA down the road (this might not be related or it might be a precursor, I don't know)

 

[MichaelB]

Educate me a bit here. If a HC pulls out of ACA does that mean they won't offer any insurance at all or not through the exchange only? Are they still bound by the same requirements (ie no refusal for preexisting conditions) or can they dispense with that inconvenience (on their part)? I saw the news and it said Aetna was getting out because the costs were much higher than expected (more sick people which means you actually have to pay the insurance rather than just taking in premiums for people that don't get sick).

Trying to understand the impact of a potential repeal of ACA down the road (this might not be related or it might be a precursor, I don't know)

Insurers are not pulling out of the ACA. Aetna is not pulling out of the ACA. Most of the announcements have been about cancelling plans for expansion. In this case, Aetna will continue to sell plans off-exchange and also enjoy a brisk and growing business with the ACA Medicaid expansion marketplace.

Off exchange and Medicaid expansion represent around 20M policies. On exchange represent another 12M or so, and are doing well in many large states, such as California and Texas.

 

[socca]

[Aetna is] not the lowest price player in the market exchanges where they participate, so their announcement will probably reduce competition but should have little impact on the subsidies.

In 2016, Aetna offered the lowest-cost Bronze plan in my area (quite a bit cheaper than the next lowest - BCBS of FL). If I recall correctly, Humana was in third place.

It will be interesting to see what's available off-exchange in 2017. If I could purchase a policy with a non-ACA compliant deductible (such as $12k, $24k, or even $48k), that would be awesome. The total annual cost including the ACA non-participation tax penalty might be less than the cheapest 2017 on-exchange Bronze policy.

 

[timo2]

off-exchange plans are ACA. My employers health plan is ACA. The exchange plans are ACA. ACA is a regulatory framework. Aetna is only pulling out of the exchanges. IIRC, people that don't need a subsidy may get a better deal off-exchange anyway.

As a sidenote, my old physician wouldn't take Aetna because they were awful for his clerks to deal with. I've heard other anecdotal stories about them from medical people that reflected poorly on Aetna. It could be they just are poorly run?

 

[FUEGO]

I believe in my market in Raleigh NC, we only had UHC, Aetna, and Blue Cross. Now we are down to Blue Cross plus any new entrants for 2017.

I recall that UHC was the cheapest (the plan I went with) and Aetna was second cheapest. So there are decent odds that the most expensive plans with Blue Cross will mean higher subsidies for those in my zip code. I imagine we'll stick with one of the cheaper silver plans since we get lots of cost sharing subsidies too, thereby making the silver plans more valuable than the platinum plans ($0 deductible on our current silver plan, for example).

 

[Fermion]

I believe in my market in Raleigh NC, we only had UHC, Aetna, and Blue Cross. Now we are down to Blue Cross plus any new entrants for 2017.

I recall that UHC was the cheapest (the plan I went with) and Aetna was second cheapest. So there are decent odds that the most expensive plans with Blue Cross will mean higher subsidies for those in my zip code. I imagine we'll stick with one of the cheaper silver plans since we get lots of cost sharing subsidies too, thereby making the silver plans more valuable than the platinum plans ($0 deductible on our current silver plan, for example).

Yes, this is more what I was aiming at in my original post. I think this is actually a net win for early retirees in areas that had Aetna as one of the cheaper options (and it must have been too cheaply priced if they lost $200m). So I think your silver plan subsidy will indeed go up.

Edit, I mean for someone who chooses the BCBS option, maybe because like us they need the wider network but it was the more expensive plan before this partial pull out.

 

[socca]

off-exchange plans are ACA. My employers health plan is ACA. The exchange plans are ACA. ACA is a regulatory framework. Aetna is only pulling out of the exchanges. IIRC, people that don't need a subsidy may get a better deal off-exchange anyway.

In 2016, all of the off-exchange major medical plans I saw were ACA-compliant. The off-exchange premiums were identical to the on-exchange premiums, which is why I went ahead and used the exchange.

 

[FUEGO]

Yes, this is more what I was aiming at in my original post. I think this is actually a net win for early retirees in areas that had Aetna as one of the cheaper options (and it must have been too cheaply priced if they lost $200m). So I think your silver plan subsidy will indeed go up.

Edit, I mean for someone who chooses the BCBS option, maybe because like us they need the wider network but it was the more expensive plan before this partial pull out.

Yeah, I got what you're saying and have long thought about it. As a subsidized ACA exchange participant, we should hope for horribly expensive silver policies that make the second lowest cost silver plan come with a huge subsidy. Like the $30k+ per year subsidy that some get in Alaska IIRC. Then possibly use that subsidy on the cheapest silver plan for nearly free coverage or use it toward a gold or platinum plan that might become a better option.

I think our Blue Cross plans were broader network but more expensive with higher copay/deductible (even with our awesome high cost sharing subsidies), so we'd have $500-1000 deductibles and $2000-3000 family max OOP instead of $0 deductible $1000 max fam OOP with current UHC plan.

 

[Fermion]

Yep. Right now in Washington state we have some cheapo silver plan in our region that is causing the second lowest plan to be really low.

For example, if we were to get the exact same blue cross silver plan we have now in a county that is just 90 miles away, our subsidy would be $200 more (we would actually pay $200 less per month than we do now). Being homeless, I have given some thought about how to "move" ourselves to that county. Might involve having to stay at an RV park for a month to prove new residency.

 

[bUU]

KFF projects lots of second-lowest silver plan premium changes in 2017, mostly increases averaging about 9%.

Analysis of 2017 Premium Changes and Insurer Participation in the Affordable Care Act’s Health Insurance Marketplaces | The Henry J. Kaiser Family Foundation

But that's mostly urban estimates. In rural areas, the picture is a lot more troubling.

Following Some Withdrawals, More Counties Could Have One ACA Marketplace Insurer in 2017 | The Henry J. Kaiser Family Foundation

 

[rbmrtn]

We started with only one insurer. They were expensive, some of the highest premiums in the country. Turns out they overpriced, last year I got rebates enough to cover about 4 1/2 months of premium. The subsidy calculation can get weird, this year they dropped the cost of the silver plans but the bronze stayed about the same. As a result the PTC was reduced substantially which in turn made bronze plan cost rise ( subsidies reduced ). I recall Humana came in the 2nd year, UHC came in last year and leaving this year.

 

[explanade]

There are accusations that Aetna threatened to cancel its planned ACA expansion if its acquisition of Humana was rejected by the DoJ:

The only possible conclusions are, 1. Aetna’s risk-forecasting team must be remarkably incompetent to suffer such a reversal of expectations in the course of a single quarter, or 2. Something else must have happened.

What could that something else be? Well, for one thing, the Department of Justice announced on July 21 that it would sue to block Aetna’s proposed $37-billion acquisition of Humana, a deal that the companies said would help them compete in the healthcare marketplace. (The government also sued to block Anthem’s proposed acquisition of Cigna, another deal it said that would diminish competition in health insurance.)

Bertolini said Tuesday that its dealings with the Justice Department on the Humana deal are “a separate conversation” from its evaluation of the exchange business. Is that entirely plausible? Its claim that it needs Humana to preserve its competitive health in the insurance market would only be undermined by enthusiasm for the ACA exchange business. In any case, the chances that Aetna would tie the two issues together for the record are nil, so you be the judge.

What ails the Obamacare insurance exchanges? (It's not what you think.) - LA Times

 

[pb4uski]

It seems to me that if the exchange business provided adequate returns that Aetna would stay in it irrespective of its DoJ issue... but if the returns are inadequate then it needs to withdraw and deploy capital in more profitable endeavors... that's just smart business.

 

[marko]

Educate me a bit here. If a HC pulls out of ACA does that mean they won't offer any insurance at all or not through the exchange only? Are they still bound by the same requirements (ie no refusal for preexisting conditions) or can they dispense with that inconvenience (on their part)?

I've said this a few times before on this forum:

As a Marketing guy for over 30 years, I see the greatest failing of ACA is a complete lack of a simple, clear, concise explanation of what it is, how it works and what's involved.

At roll-out, I had been hoping for some set of PSA's on TV, a home mailer to every person in the country and maybe even a half hour "must see TV" special on this change.

Crickets! As my boss would say "Amateur Hour".

Six years later, even on this forum of above average savvy consumers, there is a ton of misinformation and myth.

Sad.

 

[Sojourner]

So if Aetna is pulling out of the ACA market in various states, yet continuing to offer similar (or identical) plans in the private market in those states, I would assume this means they are making significantly more profit in the private market. Is that a fair assumption? And if so, why is that? Could it be because people who buy plans through the exchanges are, on average, not as healthy and more likely to exceed their deductibles? Or maybe, since people choosing ACA plans tend to qualify for cost sharing subsidies, they are more likely to use health care services "frivolously", thus eating into Aetna's profit margins? Or maybe a combination of these or other factors? And if these are the reasons, wouldn't this ultimately affect every insurance company offering plans through the exchanges?

 

[Fermion]

I think it is quite obvious that people buying on the exchange are not as healthy. A blind man could have seen that coming.

edit: And use more services surely. The same people who used to go to the emergency room when their child had a cold.

 

[explanade]

Well the people buying on the exchanges can also buy off the exchanges.

Only advantage in buying on the exchanges is eligibility for subsidies?

Oh and it's one web site to view plans from several different insurers.