In another blow to President Obama’s Affordable Healthcare Act, Aetna announced that it is reducing its overall presence drastically in the individual exchanges starting in 2017.
The big insurer will begin to stop offering its policies on the different exchanges of 11 of 15 states where it operates currently, according to its press release issued on Monday.
Aetna will just sell products from Obamacare in Iowa, Delaware, Virginia and Nebraska said the announcement. Aetna earlier in August has said that it was stopping its expansion plans for exchanges in 2017 and was reviewing its participation in the signature healthcare reform program of President Obama.
Aetna said in its press release on Monday that it lost over $430 million in its unit of individual policies since the opening in 2014 of the exchanges.
Aetna, which as of June 30 had over 838,000 customers from exchanges, said policyholders were turning out to be sicker as well as costlier than had been expected.
The insurer, along with peers in the industry, has criticized this federal program that was designed to mitigate those same risks.
Providing an affordable healthcare option that is high quality to consumers is not possible if a balanced risk pool does not exist, said Mark Bertolini the CEO of Aetna.
The company is to continue offering its individual polices available outside the Obamacare exchanges in most of the markets where it does business now.
Products that are off-exchange are not eligible to receive federal subsidies.
The White House said on Monday that the exchanges were serving more than 11 million people. They added that the exchanges brought down the rate of uninsured people to its lowest level on record.
Kevin Counihan the CEO at the exchanges said the decision by Aetna to alter its participation in the marketplace does not create any change in the fundamental fact that the marketplace for health insurance will continue bringing quality coverage to millions of people in the U.S. next year and for years to come.
Aetna’s announcement follows the blocking by the Justice Department last month of its plans to merge with Humana, as well as the purchase of Cigna by Anthem.
Anthem linked its merger with its participation in Obamacare.
As with Aetna, an increasing number of health insurers on the exchanges under Obamacare are expressing concerns over the viability of the current program as they incur big losses.