The dust is just beginning to settle from a recent and massive decision involving the third largest insurer in America heel turning on ACA exchanges in all but four states.
Last week Aetna announced they would be leaving ACA exchanges in nearly 70% of the counties they were currently serving over financial concerns with those enrolled in their plans. The problem is not enough young and healthy individuals are purchasing plans and those who are enrolling are costly.
This announcement shook up the industry and came weeks after the Department of Justice filed in federal court to block their proposed merger with Humana. Aggressive industry consolidation has raised antitrust concerns and questions over whether consumers will have adequate choice in a 2017 enrollment period expected to be volatile due to rising premiums in the ACA marketplace plans.
The aftermath of Aetna’s decision to exit most ACA marketplaces leaves many questions for individuals all over the country. For example, in states like Missouri, Aetna is the largest insurer.
In the “Show Me State,” plans will still be available by going direct to the insurers, however, the majority of folks in that state qualified for assistance under the law. They will be forced to find a different carrier.
Even more problematic are certain parts of the country where there now are zero choices through the exchanges which are now driving a wedge into the foundation the largest piece of domestic legislation passed in a generation. How can someone be helped if there are no options available?
This is a story that keeps on giving and last week it was revealed through a freedom of information request that Aetna CEO warned federal officials of their plans to leave ACA marketplaces if they blocked the proposed merger with Humana.
This raises the question of whether it is good for the government to be involved in this industry. The fundamental mechanics of the law are unraveling in front of us because there have not been enough people signing up. As a result, insurers are bailing.
The Medicaid expansion has not happened in many states. Costs also continue to rise and there fails to be any real evidence to show cost containment. A serious discussion will need to be had this election season because 1/6th of our economy is at stake.
The Big Insurer Marketplace Exodus & Fully-Insured Plans in 2017 https://t.co/FQ3HH1D0c7
— Sean McGuire (@SeanMMcGuire) August 23, 2016
In many ways, it is becoming a tale of two ACA’s. This is driven heavily by geographic and socioeconomic variables. For individuals on the coasts, this is turning out to be a favorable program with plenty of choices. Those in the south and midwest are having different experiences and now some counties have one or at times zero choices.
For some people it is great and others it is terrible.
When assessing it from a high level it would appear that this has turned out to simply be a bad business deal that has gone wrong. Originally Aetna was an ardent supporter of ACA exchanges as recently as this year. This was until the numbers came in and the government got in touch with their business.
The question is where will we go from here? Do we cut our losses or double down on the program. This is something policymakers must wrestle with sooner than later. 2017 will be a year to watch as serious public policy fixes are going to be needed to protect individuals in places with no choice. All of this could apply to you and open enrollment is just around the corner.
As we move forward it is important to have a strategic partner that can help advise you of all of these changes. E.D. Bellis would love to be that advisor for you. Check out our website and download our free ACA compliance guide to ensure that your organization does not get caught off guard with what is coming.