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July 22, 2016

Humana is pulling out of at least eight states' ACA exchange markets

Daily Briefing

    Humana on Thursday announced that it will stop selling Affordable Care Act (ACA) exchange plans in eight states for the 2017 coverage year.

    Humana made the announcement on the same day the Department of Justice filed a lawsuit to block the insurer's proposed merger with Aetna.

    DOJ files lawsuits to block insurer mega-mergers

    The insurer in its earnings report said it will sell exchange plans in "no more" than 11 states for the 2017 coverage year, down from the 19 states in which it sold 2016 exchange plans.

    In addition to reductions in its exchange business, Humana officials said the insurer will no longer offer ACA-compliant individual health plans sold off of the exchanges in "substantially all" markets.


    According to Modern Healthcare, Humana's withdrawals likely will have the most significant effects on local markets. The company will offer ACA exchange plans in just 156 counties across those 11 states for the 2017 coverage year, compared with 1,351 counties in which it sold 2016 plans.

    Given its scaled-back presence in the exchange market for 2017, Humana said it expects to collect between $750 million and $1 billion in premiums for exchange plans next year. In comparison, the company expects to receive about $3.4 billion in premiums for its 2016 exchange plans.

    UnitedHealth will exit all but a 'handful' of ACA exchanges

    Humana in the report said scaling back its exchange business will help the company "retain a viable product for individual consumers and address persistent risk selection challenges."

    Reasons for the withdrawals

    Humana attributed its decision to reduce its exchange business to higher-than-expected claims costs in the individual market. In addition, Humana officials said the insurer is required to make more payments through premium stabilization programs than it had anticipated (Mershon, CQ HealthBeat, 7/21 [subscription required]; Herman, Modern Healthcare, 7/21; Ferris, The Hill, 7/21; Humana earnings report, 7/21).

    How to win over exchange patients and other consumers

    With so many new competitors and players in the health care market, health systems need to have broad appeal to keep patient traffic in network.

    Physicians are (and always have been) at the top of the list—but four other decision makers also need your attention: informed consumers, activated employers, regional partners, and population health managers.

    Download our infographic to learn more about each of these groups and how to impress them.


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