2 insurers pull out of state exchange

Aetna’s exit means fewer choices for consumers

Insurers that plan to sell coverage on the exchange, by region. An “x” indicates that Coventry or Aetna intended to sell in that region, but both withdrew on Wednesday.

x Region 1: Blue Cross and Blue Shield of Georgia

x Region 2: Blue Cross and Blue Shield, Peach State, Alliant, Humana

x Region 3: Blue Cross and Blue Shield, Peach State, Kaiser, Alliant, Humana

Region 4: Blue Cross and Blue Shield, Alliant, Humana

Region 5: Blue Cross and Blue Shield, Humana

x Region 6: Blue Cross and Blue Shield, Humana

Region 7: Blue Cross and Blue Shield, Alliant

x Region 8: Blue Cross and Blue Shield, Peach State, Humana

Region 9: Blue Cross and Blue Shield, Alliant

x Region 10: Blue Cross and Blue Shield, Alliant, Humana

Region 11: Blue Cross and Blue Shield, Humana

x Region 12: Blue Cross and Blue Shield, Humana

x Region 13: Blue Cross and Blue Shield, Alliant, Humana

x Region 14: Blue Cross and Blue Shield, Humana

x Region 15: Blue Cross and Blue Shield

Region 16: Blue Cross and Blue Shield, Humana

Two insurance companies are abandoning plans to offer health coverage on a new online marketplace created by the Affordable Care Act just eight weeks before the website is supposed to launch.

The action means that consumers, particularly those in rural Georgia, will have fewer options when the so-called insurance “exchange” opens Oct. 1.

Aetna’s recent purchase of Coventry changed the company’s priorities, spurring the decision to withdraw its proposal for the insurance website, Aetna spokesman Walt Cherniak said. Both companies had already submitted health plans for the exchange before their deal closed in May.

“We believe it is critical that our plans not only be competitive, but also financially viable, allowing Aetna and Coventry to meet the long-term needs of the exchanges in which we choose to participate,” Cherniak said.

He added that Aetna and Coventry will still offer individual health plans in Georgia outside of the exchange and may reconsider selling on the exchange in the future.

Five other insurers — Blue Cross and Blue Shield of Georgia, Humana, Kaiser, Peach State and Alliant — also have filed dozens of health plans to offer on the federally run exchange website.

Georgia Insurance Commissioner Ralph Hudgens said Wednesday he was not surprised that Aetna and Coventry decided to bail out of the exchange.

“Obamacare has created great uncertainty in the health insurance market,” Hudgens said in a statement Wednesday,

Hudgens filed an emergency request with the Obama administration on Monday to delay approving rates for health plans to be sold on the exchange, saying prices could more than double what some consumers are paying today.

A spokeswoman for the U.S. Department of Health & Human Services said late Wednesday afternoon that the agency is still reviewing Georgia’s request for a 30-day extension and had not yet made a decision.

Nearly 900,000 Georgians are expected to shop on the exchange — a key element in the Affordable Care Act’s aim to provide health coverage to millions of uninsured Americans. Slated to open Oct. 1, the exchange will mostly serve people who don’t get insurance through their jobs, such as the unemployed, self-employed and students.

While five insurers still plan to sell policies on the exchange, some Georgia consumers will have fewer options. That’s because only Blue Cross is planning to offer plans in every region of the state.

In southwest Georgia near Americus, Coventry was going to be the only other option available on the exchange. Now residents there will have just one.

“It’s always reassuring when you have three or four or five carriers around to know you won’t be limited,” said Russ Childers, an insurance broker in Americus.

Blue Cross must satisfy state regulators that its rates are reasonable, Childers said. But Coventry would have provided another option for consumers since insurers often set up their plans differently in terms of benefits, co-pays and other factors, he said.

Blue Cross is moving forward with its exchange plans, the company said.

“Serving the entire state of Georgia has always been our mission,” spokesman Bert Kelly said.

Residents in those areas may still be eligible for federal subsidies to help make health insurance affordable, said Tim Sweeney, a health care policy expert at the nonprofit Georgia Budget & Policy Institute.

“What is in place to make coverage affordable in large part is also the federal tax credits that are going to offset the costs for many uninsured folks,” Sweeney said. “That’s often been overlooked in some of the discussions around this.”

Graham Thompson, executive director of the Georgia Association of Health Plans, an industry trade organization, said a number of insurance companies are hesitant to sell on the exchange next year. Health plans need to be confident that they will bring in as much money in premiums as they will have to pay out in claims, he said.

“This is a time of tremendous transition,” Thompson said. “This is a very new delivery model, and it will serve a very different, unknown population.”

Thompson said other insurers may jump into the exchange in future years.

By deciding to keep selling outside of the exchange to customers who can afford to buy a health plan without a subsidy, Aetna may be trying to find a way to attract customers who will be less risky — and therefore less costly — than those who will shop on the exchange, said Bill Custer, a health care expert at Georgia State University.

The marketplace of individuals who buy their own health plans is relatively small in Georgia, since most people get insurance at work or through Medicare or Medicaid. Many large insurers focus on running health plans for large companies, not on selling to individual consumers who buy their own plans.

But Custer said that may change.

“We would expect, over time, more Georgians would be insured on the exchange and that more insurers will enter,” he said.

There were no indications Wednesday that the other insurers who have already filed to sell in Georgia are likely to exit from the exchange.

Humana, for example, said it had filed plans to sell health plans in Georgia and a number of other states, primarily where the company already has a business presence and established networks of doctors and hospitals.

“Georgia remains one of the key exchange states for Humana,” said spokesman Mitch Lubitz.

With Coventry dropping out, Humana is likely to be only insurer besides Blue Cross to offer coverage in seven of the state’s 16 regions. In two regions, Blue Cross may be the sole provider.