Here’s a link to the original article: http://www.ibamag.com/news/another-health-insurer-announces-exits-from-obamacare-markets-31603.aspx
by Caitlin Bronson | May 06, 2016
Weeks after UnitedHealthcare announced it would no longer be offering Obamacare policies in the majority of state markets, another of the country’s leading insurers has taken the first steps in following suit.
Officials with Humana Inc. said Thursday that the insurer plans to exit markets in at least two states to stem financial losses. As of 2017, the insurer won’t sell Affordable Care Act plans in Alabama and Virginia.
Elsewhere, Humana will pull off-exchange, ACA-compliant plans from Tennessee and withdraw some of its offerings in Colorado.
The announcement comes one day after Humana said it would evaluate each state and decide whether to continue selling plans through the ACA or directly to consumers. The move is expected to save the company money, following another disappointing financial performance – first-quarter earnings for Humana fell 46%, dogged by both the exchange plans and its direct-to-customer Medicare Advantage plans.
“Over the next few weeks, we will continue working with state and federal regulatory agencies to finalize these decisions prior to the open-enrollment period this fall,” said Humana spokesperson Tom Noland.
The insurer currently sells plans in 15 states, and has about 554,300 individual members from the exchange.
A potentially larger exit would not affect as many markets as UnitedHealth’s withdrawal will, but it could further limit options for consumers in more rural parts of the country – particularly in the South, where it overlaps with UnitedHealth in Alabama, Georgia and Tennessee.
The withdrawal is not a surprise for some industry observers; thanks to new ACA enrollees who have medical costs 22% higher than the average American, insurers lost money in the individual markets of 41 states during 2014. With those figures, even more companies may begin pulling out.
Anthem, another leading insurer, has already said it continues to have “serious reservations” about the state of the market and has reserved the right to pull out if necessary in the future.
That signals uncertainty ahead, some say.
“If you thought it was going to get fixed in a year or two, you’d stick around,” said Robert Laszewski, who runs Health Policy and Strategy Associates. “The implications of that are that the program just isn’t working in its current form.”
But not all of the country’s “Big 5” health insurance companies feel this way. Last week, Anthem Chief Executive Officer Joseph Swedish reaffirmed the company’s commitment to the ACA markets, saying Anthem had more customers on the exchanges than it had anticipated this year.
More than 184,000 new members signed up for coverage under Anthem through the first quarter, and executives of the company say Anthem will at the very least break even, and possibly hit small profit margins of 3% to 5%.
Swedish said the company’s pending acquisition of Cigna Corp. will put it in an even better position to remain competitive and perhaps even expand into more markets.