Kentuckians who purchased Aetna health insurance plans via the state exchange in 10 Kentucky counties may face more limited options when open enrollment starts Nov. 1.
The Connecticut-based health insurer announced in an earnings call on Wednesday $200 million in losses between January and March. The company expects to lose more than $300 million by September.
Aetna CEO Mark Bertolini said in a statement that the company is withdrawing its plans to expand offerings in state exchanges next year and that it would reconsider selling plans in the 15 states where it currently participates in exchanges.
If Aetna departs Kynect, the Kentucky exchange, that would leave Boone, Campbell, Owen and Kenton counties with only two exchange plans.
In July, Louisville-based Humana -- which Aetna is seeking to acquire in a $37 billion deal that's the subject of a federal antitrust lawsuit -- also said it plans to pull out of six of the 17 states where it sells exchange plans. In Kentucky, it’s in nine counties, including three counties that Aetna is also in. If both companies pull out, Fayette, Oldham and Jefferson counties would be left with three plans.
Jude Thompson, former president of the individual market business at Wellpoint and Anthem, said one of the biggest issues has been people going in and out of exchanges. He said consumers can easily sign up for health coverage when they're sick, and then jump off after health services are paid for. Under the Affordable Care Act, the penalty for not having insurance is either 2.5 percent of annual income up to the national average price of a bronze exchange plan or $695 per adult, whichever is higher.
"If you wait until the point you need health care, and then you buy your insurance, and you run up a $100,000 bill and you pay your $400 premium, and then you dropped your coverage, that math will never work," he said. "The idea of insurance is spreading the risk of one among many."
Aetna only started selling insurance plans on exchanges for 2016. It pulled out of Utah, Kansas and Washington, D.C. exchanges earlier this year. Aetna sells plans in nearby states Missouri, Ohio, North Carolina, Illinois and Virginia.
Cara Stewart, an attorney with the Kentucky Equal Justice Center, said if the insurers leave the market, it will have a negative impact on consumers.
“You have even less options to choose one that fits your health needs,” Stewart said.
In October, Bertolini told investors in an earnings call that the exchanges had long-term market potential.
“It’s still early," he said. "We think it’s way too early to call it quits on the ACA and on the exchanges. We view it still as a big opportunity for the company."
Photo above of Aetna's headquarters in Hartford, Connecticut.
