Aetna’s decision to gut its presence on the Affordable Care Act’s online insurance exchanges will mean fewer choices next year for St. Louis area residents — and there will be stark differences in those remaining options.
The move creates uncertainty in Missouri’s individual health insurance market, where Aetna is the biggest insurer.
Analysts also speculated the decision may be a way for Aetna to put pressure on the U.S. government, which is seeking to block its merger with Humana.
Citing financial losses, the nation’s third-largest insurer announced Monday that it would slash its exchange-offered individual plans for 2017 to just four states from 15. As a result, Missouri residents won’t be able to buy Aetna plans next year on the website HealthCare.gov.
Aetna will continue to sell individual plans in Missouri through local brokers, just not through the federal exchange.
Purchasing through the exchange, however, is the only way a consumer can get a federal subsidy to help cover insurance premiums. About 90 percent of Missourians buying exchange plans received a subsidy.
Aetna also is dropping out of exchange-offered plans in Illinois, but the insurer doesn’t offer such plans in Metro East.
Aetna’s departure next year will leave Missouri residents of the St. Louis area with only two insurer choices when shopping on HealthCare.gov: Anthem Blue Cross Blue Shield or Cigna.
The issue that concerns some local brokers is the lack of overlap between networks.
Anthem’s current network excludes BJC HealthCare facilities and Washington University Physicians, but includes most other hospitals and providers.
Cigna’s network only includes BJC facilities, Washington University Physicians, and St. Anthony’s.
And those very limited choices worry brokers like Clayton-based Emily Bremer.
“The impact of this announcement is very significant to the St. Louis metropolitan area,” Bremer said.
To make matters more complicated, Anthem is currently seeking to acquire Cigna, potentially limiting choices even further in the future. Federal antitrust regulators filed a lawsuit last month to block the deal, though a Justice Department official said Friday that the U.S. government is open to hearing settlement offers from the insurer.
What’s puzzling to health policy experts is the fact that Aetna is not leaving the individual market entirely. UnitedHealth Group said this year it would leave Missouri’s individual insurance market, also citing significant losses.
“The timing is definitely suspect,” said Dan Meuse, deputy director of the state health reform assistance network at Princeton University’s Woodrow Wilson School of Public and International Affairs.
Meuse was referring to federal antitrust regulators filing a lawsuit last month to block Aetna’s acquisition of Humana.
Antitrust regulators said the two separate insurance megamergers — Anthem-Cigna and Aetna-Humana — would result in less competition, negatively affecting Americans.
The proposed Aetna-Humana merger also drew opposition from Missouri, which is worried about reduced competition. In May, the Missouri Department of Insurance issued a preliminary order to bar Aetna and Humana from offering certain insurances in the state if they combined.
Missouri’s insurance regulator said Tuesday it has already noted the lack of competition in health insurance marketplace in Missouri.
The department said it was made aware of Aetna’s move late Monday. However, it declined to answer any other questions about the decision, pointing to a voter proposition passed in 2012 that bars the department from interacting with the federal marketplace.
From the beginning, Aetna was a “champion” of the exchanges, Meuse said, and one month after the Justice Department blocked its merger, it has decided to sharply scale back its individual offerings.
Linda Blumberg, senior fellow of health policy at the Urban Institute, agrees.
“There is a little something weird about the timing here,” she said.
Health policy experts said industry experts are speculating about whether this is a move to put pressure on the federal government to agree to a settlement over antitrust concerns because of Aetna’s proposed merger with Humana.
“It can be a negotiating tactic for changes but it comes at the expense of potential customers,” Meuse said.
Aetna, which does business as Coventry in Missouri, has a substantial market share in the individual market.
It is the largest insurer of individuals in Missouri, holding a 38 percent market share. It’s not clear what part of Aetna’s individual business in the Show-Me state is based on exchange-based individual plans versus plans off the exchange, primarily through brokers. Aetna declined to provide that information.
Retreating from that customer base is confusing to some policy experts.
“Overall, I think you’re giving up a lot of customers. It doesn’t seem to compute,” Meuse said.
Aetna, however, says it needs to reduce its participation on exchanges to stem losses. The insurer earlier this month said it expects to lose $300 million this year from individual coverage it sells on the exchanges, or triple what it lost last year. Earlier this year, Aetna had said it hoped to break even in 2016.
When it announced that expected loss, Aetna had said it was canceling expansion plans for its exchange business in 2017, and it promised a hard look at its current participation. The company covered about 838,000 people through the individual exchanges at the end of the second quarter.
On Tuesday, the insurer said it will sell coverage on exchanges in 242 counties next year, down from 778. The Hartford, Conn.-based insurer will still sell on exchanges in Delaware, Iowa, Nebraska and Virginia next year.
Aetna says those 242 counties represent about 20 percent of the people it currently covers through exchange-offered individual plans.
Dwindling exchange participation from insurers is becoming a concern because competition is supposed to help control insurance price increases, and many carriers have already announced plans to seek price hikes of around 10 percent or more for 2017. Some states like Alaska and Oklahoma will be left with only one participant selling individual coverage in 2017.
The Associated Press contributed to this report.
Samantha Liss • 314-340-8017
@samanthann on Twitter
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