Approximately 8,000 South Carolina residents across 14 counties will have to change health plans in 2017.
Connecticut-based health insurance provider, Aetna announced on Monday it will slash participation in the exchange under the Affordable Care Act in more than two-thirds of the 778 counties where it offers coverage.
The company’s CEO, Mark Bertolini cited losses of more than $430 million since January 2014 as a reason for the change. He pointed out the other approximately 40 insurers who have exited the exchange.
“Providing affordable, high-quality health care options to consumers is not possible without a balanced risk pool,” Bertolini said.
Plainly, the clientele on the exchange is proving to be more expensive than the company had anticipated.
More than half of Aetna’s on-exchange membership is new in 2016, according to Bertolini.
State Insurance Department Director Ray Farmer said in a statement the decision surprised his agency, which was in the middle of reviewing Aetna’s filing ahead of the enrollment period that begins in November.
“Although Aetna does not participate in the FFM [Federally-facilitated Health Insurance Marketplace] statewide, this decision will still have significant ramifications for those individuals that selected Aetna coverage. Based upon company information, our understanding is that approximately 8,000 South Carolinians have coverage through Aetna plans that were purchased through the Federal Marketplace. We have been told that an additional 3,000 South Carolinians (approximate) have Aetna coverage that was purchased through the private market for individuals and families (i.e., outside of the FFM).
This is a further illustration that the Affordable Care Act cannot work under this present structure.”
An additional 208,000 people in South Carolina are insured through the federal marketplace.
What Aetna’s exit means for the insured in South Carolina
-People who purchased an on-exchange plan through Aetna won’t be affected during the 2016 plan year. The company has said it will communicate its clients’ options going forward.
-Aetna may re-enter the South Carolina marketplace if the exchange improves. Bertolini cited hope in a recent announcement by the U.S. Department of Health and Human Services that it would explore options to modify risk adjustment.
-It’s too early to tell how the change will affect the approximately 3,000 people—across an additional 10 counties—who have off-exchange insurance plans through Aetna, according to DOI spokeswoman, Ann Roberson.
-The marketplace under the ACA seems to be contracting in South Carolina. “We continue to be concerned about the level of competition that is available through the Federal Marketplace,” Roberson wrote in an email. Two insurers—Blue Cross and Blue Shield of South Carolina and its subsidiary, Blue Choice—are expected to continue offering plans on the exchange in 2017. UnitedHealthcare announced earlier this year it would exit the marketplace in South Carolina at the end of 2016.
The DOI is encouraging consumers to watch out for notices informing them of changes in available carriers and plans. The agency also wants consumers to know their options when the open enrollment period begins on November 1.