The Record: Aetna perspective
AETNA'S DECISION to withdraw from 11 of 15 state health care exchanges under the Affordable Care Act has prompted a predictable round of political responses. Republicans say the move proves "Obamacare" is failing. Some Democrats say the company's action has more to do with politics than with health care, noting that it comes soon after the U.S. Justice Department sued to block Aetna's proposed merger with Humana, one of its competitors. While just about everything involving health care today is viewed through a political lens, some perspective is needed.
Aetna's withdrawal hardly means the ACA is in a "death spiral," as some critics have predicted since the law was signed more than six years ago. Aetna was active in only 15 states. And the company said it may expand its ACA presence in the future.
The impact in New Jersey will be minimal. Aetna has not participated in the state's ACA exchanges, but planned to enter the market next year. Those plans have changed, but residents buying insurance on state exchanges for 2017 still will have four companies from which to choose.
Aetna says it is leaving the ACA market because it expects to lose $300 million this year participating in the exchanges. The company says the problem is that its ACA customers have higher insurance claims than those with employer-sponsored insurance.
A goal of the ACA from the outset has been to convince young and presumably healthy people to buy insurance, thereby spreading the costs of paying claims over a larger pool. That's the law, but some prefer to forgo coverage and pay a penalty instead. However, that penalty, which began at a rather low $95 for an individual, is now $695 for those not having insurance in 2016. That should encourage more people to obtain coverage and help solve the problem Aetna and other insurers may be experiencing.
Still, some skepticism about Aetna's move is warranted. The Wall Street Journal reported that Aetna said in a July 5 letter to the Justice Department that if the government tried to block the Humana merger, the company would "very likely" leave the public exchange business. It has now done that, at least up to a point.
It is also noteworthy that until recently, Aetna had been a big booster of the ACA. The $300 million the company said it will lose this year is a lot of money, but must be viewed in context. Aetna reported 2015 revenues of $60 billion and income of $2.4 billion.
It is indisputable that the ACA has extended insurance coverage to millions of Americans by expanding Medicaid and requiring insurers to cover those with pre-existing conditions. But problems remain with regard to high deductibles and a lack of exchange insurance options, especially in some rural areas.
One of the first tasks for a new president and a new Congress in January should be to ignore partisan politics and make the ACA work better for all Americans.