Aetna to Stay Out of Individual Health Market in 2018
Aetna Inc. plans to stay out of the U.S. individual major medical insurance market in 2018, according to Mark Bertolini.
Bertolini, the Hartford-based company’s chairman, talked briefly about Aetna’s plans for 2018 during a conference call the company held to discuss fourth-quarter earnings with securities analysts.
“We have no intention of being in the market for 2018,” Bertolini said, in response to a question from an analyst. “There’s no possible way we’d be able to do that, given the unclear nature of where regulation is headed.”
If Aetna were trying to participate in the market in 2018 under the rules now in effect, it would have to have products and rates ready by April, Bertolini said.
Aetna would like to help shape the transition to whatever system will be in place in 2019, and it hopes to return to the individual market in 2019, Bertolini said.
Aetna, which once was an enthusiastic supporter of the Affordable Care Act public exchange system, sharply reduced participation in the individual major medical this year, after reporting in mid-2016 that early 2016 losses were much higher than it had expected.
The company now has about 240,000 individual major medical enrollees, down from 965,000 at the end of 2016, executives said.
About 190,000 of the current individual health enrollees have coverage purchased through an ACA public exchange program.
An antitrust judge recently suggested that Aetna might have exaggerated individual health market concerns, and cut back individual health market operations, to increase the odds that Aetna’s proposed acquisition of Louisville, Kentucky-based Humana Inc. would get through the antitrust review process. The judge ruled against the deal.
Aetna executives said the company’s individual health business really did do poorly in 2016, and that the actual full-year loss was about $450 million, up from a loss prediction of $350 million made earlier in the year.
Bertolini said the company is still reviewing the antitrust case ruling and may file an appeal.
How Aetna Did
Aetna as a whole reported $139 million in net income for the quarter on $16 billion in revenue, compared with $321 million in net income on $15 billion in revenue for the fourth quarter of 2015.
The company ended the year providing or administering health coverage for 23.1 million people, down from 23.5 million a year earlier.
At the commercial insurance unit, a program for small employers that want to self-insure has been doing especially well, executives said.
Aetna also summarized the status of its participation in the ACA risk management programs. The programs originally were supposed to help buffer insurers against ACA-related swings in health risk, but they performed poorly.
Aetna says it hopes to get $202 million from the ACA reinsurance program for 2016, down from $395 million for 2015.
The company expects to have to pay $10 million in the ACA risk corridors program. The company had to pay $8 million into the program for 2015.
The company may have to pay $690 million into a third program, the ACA risk adjustment program, for 2016. That anticipated payable is down slightly, from a payable of $710 million for 2015.