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February 3, 2017

4 big insurers signal they may opt out of the next ACA open enrollment period

Daily Briefing

    The CEOs of four insurers—Aetna, Anthem, Cigna, and Molina Healthcare—this week said they are mulling whether to continue participating in the Affordable Care Act (ACA) exchange markets for the 2018 coverage year.

    Aetna CEO says insurer is mulling withdrawing from 2018 exchange markets

    For instance, Aetna Chair and CEO Mark Bertolini on Tuesday said the insurer is contemplating whether to withdraw from all exchange markets for the 2018 coverage year. Bertolini said the company will announce its decision by April 1.

    Aetna last year announced plans to sell exchange plans in just four states—Delaware, Iowa, Nebraska, and Virginia—for the 2017 coverage year, down from 15 states where it sold 2016 exchange plans. Bertolini in a letter sent last year to the Department of Justice wrote that Aetna would not be able to sustain the financial losses it incurred through its exchange business and would have "to take immediate actions to mitigate" those losses if regulators blocked its proposed merger with Humana. A federal judge last week blocked the deal, and Aetna still is considering whether to appeal the ruling, the Wall Street Journal reports.

    Aetna could stop selling exchange plans

    Bertolini told the Associated Press that it is "really impossible" for the insurer "to consider entering any new markets" for the 2018 coverage year, adding, "We have nothing but bad news in front of us right now." In addition to saying the company would not enter any new exchange markets, Bertolini said the company could opt to stop selling exchange plans altogether. "We have no intention of being in the market for 2018," Bertolini said.

    According to the Associated Press, Aetna reported that it lost $450 million on the ACA-compliant plans it sold last year. Bertolini said it is unlikely policymakers will implement any changes to bolster the exchange markets by April 1, which is the deadline by which insurers must state whether they will sell 2018 exchange plans. He added, "The stability of these pools continues to deteriorate, and unless there are significant changes, it does not bode well for the program."

    Bertolini said it is "too soon to tell" how Republicans' plans to repeal and replace the ACA—which he said likely would not take effect until 2019 "at the earliest"—could affect the health insurance market. However, he added that "everybody is very concerned about doing something rash that would blow the thing up and put people out of coverage."

    But Bertolini said he is optimistic about efforts to further reform the health insurance market, noting that Aetna continues "to actively engage in constructive dialogue with lawmakers and regulators and [is] committed to working towards preserving the positive aspects of the [ACA] and developing consumer-based approaches that deliver access to affordable, quality health care to all Americans."

    Insurers express skepticism about ACA's exchanges

    Separately, Anthem on Wednesday said it is closely observing policymakers' actions on the ACA as it develops its business plans for the 2018 coverage year. Anthem CEO Joseph Swedish said, "We will make the right decisions to protect the business. If we can't see stability going into 2018, with respect to either pricing, product, or the overall rules of engagement, then we will begin making some very conscious decisions with respect to extracting ourselves."

    In a call with analysts on Thursday, Cigna CEO David Cordani said the insurer will "fully assess whether we will participate [in the 2018 exchanges], where, and how" over the next few months, pending what regulations are established to stabilize a market that Cordani described as "fragile at best." According to the Wall Street Journal, Cigna, which is offering exchange plans in seven states this year, has been losing money on exchange plans. The insurer said that while it expects some improvement this year, it still doesn't expect to be profitable on the ACA plans in 2017.

    Molina Healthcare CEO J. Mario Molina also would not commit to whether the insurer will sell 2018 exchange plans, saying, "There are just too many unknowns at this point to give a definitive answer."

    In contrast, Centene CEO Michael Neidorff has said the company will continue to sell exchange plans as long as the exchange market does not significantly worsen by the fall. "It's business as usual, until we hear otherwise," he said, adding, "We just take calculated risks, and on this one, [policymakers are] not going to leave 20 million people uninsured."

    (Murphy, AP/Sacramento Bee, 1/31; Wilde Mathews/Jamerson, Wall Street Journal, 1/31; Wilde Mathews/Hufford, Wall Street Journal, 2/2; Livingston, Modern Healthcare, 1/31; Livingston, Modern Healthcare, 2/2; Mershon, CQ HealthBeat, 1/31 [subscription required]; Tracer, Bloomberg, 2/1; Herman, Axios, 1/24; Humer, Reuters, 2/2).

    Four principles for insurers to establish their health plan diplomacy

    Health plans have a lot in common with the modern diplomat. Diplomats have to be objective, but still empathize with the needs of others. They play a central role in an industry, without directly controlling stakeholder behavior. Finally, they have to persuade their partners to act in the best interest of everyone involved.

    Health plans typically track the actions of their members, but for successful Health Plan Diplomacy, health plans should track their own actions. In our infographic, we’ve included four diplomatic principles that plans should apply to their member interactions and the corresponding metrics to measure progress.


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