Like a sinking ship, health insurer are jumping out of the Obamacare titanic. Aetna Inc, 3rd biggest health insurer in the U.S., announced Monday that because of continuous financial losses on Obamacare plans, they will limit their market on individual insurance on the government-run online marketplaces in only (4) four states next year, instead of their current 15 states. This is the latest blow to Obamacare. The will stop offering policies on the exchanges in 11 states. They will keep selling Obamacare products in Delaware, Iowa, Nebraska and Virginia.
Aetna said that they lost $430 million in its individual policies unit since the exchanges opened in January 2014. They had 838,000 exchange customers at the end of June and they complained that those policyholders are mostly sick and costly to maintain. They criticized the federal program that should have mitigate those risks.
"Providing affordable, high-quality health care options to consumers is not possible without a balanced risk pool," said Aetna CEO Mark Bertolini.
Aetna will still offer individual policies outside of the Obamacare exchanges in the vast majority of markets where it now does business. However, those Off-exchange products are not qualified for federal subsidies.
Like Aetna, most insurers complains about the loses they incur because of Obamacare exchanges. They said premiums were too low and it can't cover the cost of care because their consumers are far sicker than anticipated.
UnitedHealthcare (UNH), the largest insurer in the U.S. is expecting to lose about $1 billion on Obamacare policies in 2015 and 2016, they will also pull out most Obamacare exchanges in 2017. Humana (HUM) announced last month that it was withdrawing nearly 1,200 counties in 8 states in 2017. Afterward, it will only be selling insurance on the exchanges in 156 counties in 11 states. Others, including several Blue Cross Blue Shield companies, are also scaling back.