Aetna to pull out of Georgia’s Obamacare insurance marketplace

Tens of thousands of Georgians with insurance through the Affordable Care Act will have even fewer coverage options next year with Aetna’s decision Monday to pull out of the health care law’s insurance marketplace in the state.

Georgia is among 11 states where Aetna announced it will no longer sell individual coverage on the ACA’s health insurance marketplace.

The move marks another blow to the stability of the Obamacare marketplaces where insurers have seen dramatic financial losses as enrollees have proved to be more costly than anticipated.

UnitedHealthcare and Cigna have also decided to abandon the Georgia marketplace. Only six insurers will remain in 2017, down from nine this year. And only one, Blue Cross and Blue Shield of Georgia, will offer plans throughout the state.

“Any loss [of an insurer] is a blow to competition,’’ said Bill Custer, a health insurance expert at Georgia State University.

Aetna covers an estimated 70,000 to 90,000 of the nearly 600,000 individual exchange members in the state, according to the Georgia Department of Insurance.

“This will cause some disruption in the market,’’ he added. “People will have to change plans.”

Nationwide, insurers offering plans in ACA marketplaces have already announced higher premiums for 2017. Consumer advocates, meanwhile, worry that more insurers pulling out of marketplaces will mean even less competition and potentially higher premiums for enrollees.

New enrollees equal high-cost care

Nationwide, Aetna has suffered more than $430 million in pre-tax losses since January 2014 in the company’s individual insurance products.

“As a strong supporter of public exchanges as a means to meet the needs of the uninsured, we regret having to make this decision,’’ said Mark Bertolini, Aetna’s CEO.

He said 55 percent of the company’s individual exchange membership was new this year, “and in the second quarter we saw individuals in need of high-cost care represent an even larger share of our on-exchange population.’’

That dynamic, “coupled with the current inadequate risk adjustment mechanism … creates significant sustainability concerns,” Bertolini added.

It will continue to participate in exchanges in Delaware, Iowa, Nebraska and Virginia next year.

A spokesman for Aetna, Walt Cherniak, said the company’s national membership in the exchanges was 950,000 last year, but that the number had dropped to 750,000 this year. “It’s reasonable to expect similar attrition this year,’’ he said Tuesday.

Overall in Georgia, 587,845 people signed up for Obamacare plans for 2016, up 9 percent increase from last year.

Taking on risk

Despite Aetna’s departure, the metro Atlanta market is expected to remain competitive, with six insurers offering plans. Five metro Atlanta counties have the highest enrollment in the 2016 state exchange, led by more than 81,000 in Gwinnett County, according to new figures from Georgians for a Healthy Future.

But in rural Georgia, there will always be a problem with a shortage of competition, Custer said. Coverage options in rural areas are already limited since Blue Cross is the only insurer offering plans statewide.

Aetna and other insurers still have the ability to jump back into the Georgia exchange market in 2018, Custer said.

“Insurers need to have more comfort in the pool of people they are going to cover,’’ he said.

Federal officials also need to change risk adjustment rules so that insurers can be more certain about the financial risks they face, Custer said. Aetna had told Georgia officials as recently as May that the company would remain in the exchange for 2017, he noted.

Bertolini said Aetna is encouraged that federal health officials will explore changes to the risk adjustment program.

“We will continue to evaluate our participation in individual public exchanges while gaining additional insight from the counties where we will maintain our presence, and may expand our footprint in the future should there be meaningful exchange-related policy improvements,” he said.

Kevin Counihan, chief executive of the federal insurance exchange, which runs most states’ exchanges, said the marketplace would remain strong and vibrant despite Aetna’s decision, the New York Times reported.

“It’s no surprise that companies are adapting at different rates to a market where they compete for business on cost and quality, rather than by denying coverage to people with pre-existing conditions,” Counihan said.