Nebraskans can heave a sigh of relief that Aetna will continue to sell individual health insurance policies in Nebraska through the government marketplace created by the Affordable Care Act.
Aetna is pulling out of 11 other states, leaving their health insurance marketplaces in tatters. In fact for the first time ever the people in one Arizona county won’t be able to purchase any insurance at all through the ACA government marketplace; no insurers are offering coverage there.
Aetna’s announcement adds to the urgency for Congress to fix the major flaws in the law and the country’s health care system.
UnitedHealthcare announced in April that it was pulling out of 30 states. Humana announced that it would drop coverage in all but 156 counties.
Sixteen of the 23 health insurance cooperatives started with billions in loans from the federal government have collapsed, including CoOpportunity Health, which operated in Nebraska.
The problem is obvious. The companies are losing too much money. Aetna said it will lose $300 million this year on ACA-compliant plans. Blue Cross Blue Shield of Nebraska said it lost $53 million last year.
On the positive side, approximately 20 million more Americans have coverage today than before the ACA was passed. And people cannot be turned down for insurance if they have pre-existing conditions.
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But it’s clear that something has to give.
“The exchanges are a mess as they exist today,” Aetna Chief Executive Officer Mark Bertolini told Bloomberg. “They’re losing a lot of money for a lot of people.”
Too few healthy Americans seek coverage through the exchanges. The people signing up are low-income individuals who receive large subsidies and people with expensive health problems. Americans who are not in either of those categories are choosing to go uninsured and pay a penalty rather pay thousands a year for coverage.
Companies are requesting high rate increases next year for ACA-compliant policies. Aetna has proposed rate hikes of 16 percent for 2017 in Nebraska. Blue Cross Blue Shield and Medica want increases averaging about 35 percent.
Federal officials pointed out his week that more Nebraskans will be eligible for bigger federal subsidies if those rates are approved, but it’s uncertain how the changes will affect insurance company revenues.
Meanwhile most employees who get their insurance through work will see the hikes in their insurance premiums go up faster than their raises, according to surveys by the National Business Group on Health and WorldatWork.
It’s a foregone conclusion that nothing will be done to improve the system until after the election. Then Congress needs to go to work. The problems with the ACA demand attention.