Humana To Abandon Obamacare Patients In 1,200 U.S. Counties

Humana is the latest health insurer to significantly pull back its participation selling subsidized individual coverage under the Affordable Care Act, announcing plans to scale back next year to “no more than 156 counties” across 11 states.

The decision means Humana HUM +0.20% will reduce its Obamacare geographic presence by nearly 1,200 counties from the 1,351 counties across 19 states where the insurer currently sells individual coverage on exchanges under the health law now. UnitedHealth Group UNH -0.12% is scaling back to three states and Aetna AET -0.21% said this week it was evaluating its participation in 15 states and wouldn’t expand to new states next year.

“The company expects its 2017 geographic presence for individual commercial offerings to cover no more than 156 counties, down from its 2016 presence in 1,351 counties ,” Humana said Wednesday in its second-quarter earnings.

Humana has been unable to manage the rising healthcare costs of individuals buying subsidized coverage under the law. Humana has also had other issues including a loss of 150,000 members reported last year after these customer enrollments were terminated by the government for “lack of proper immigration documentation and/or income status,” the insurer said last year.

Humana said its pretax income fell 20% to $636 million in the second quarter compared to $793 million. Revenues were up 2% to $14 billion.

Humana will still be in the business of offering subsidized coverage next year, but the company expects premium revenue from “ACA-compliant offerings” to drop to a range of “$750 million to $1 billion” in 2017 from $3.4 billion. Humana reported 792,000 individual commercial members at the end of the second quarter.

Due to its pending sale to Aetna, the company didn’t hold a second quarter earnings call so additional detail or commentary was unavailable other than executive statements in a press release.

“We are pleased that our year-to-date financial results are demonstrating consistently strong operational execution across our core businesses, though challenges in our Individual Commercial business remain,” Humana chief financial officer Brian Kane said in the release.

Humana and Aetna are selling a small part of their Medicare Advantage business in hopes of satisfying the U.S. Justice Department, which sued the companies last month in attempt to block their merger. The Justice Department is particularly concerned the merger would hurt competition and lead to higher prices.

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