About 20,000 Aetna policyholders in Ohio will be forced to find new health coverage next year as a result of the Connecticut-based company’s decision to pull out of the Affordable Care Act’s health insurance marketplaces in certain markets across the country.
Aetna, the nation’s third-largest insurer, said it will trim its marketplace presence in 2017 to four states — Delaware, Iowa, Nebraska and Virginia — down from 15 this year, including Ohio.
The company is just the latest marketplace carrier to announce plans for a pullback next year, shaking up the list of companies offering plans through the health insurance marketplaces as they enter their fourth year of open enrollment.
Aetna, which covers more than 800,000 people with individual marketplace plans, cited higher-than-expected medical costs as the reason for its exodus after posting a pre-tax loss in the second-quarter of $200 million from its marketplace business.
The marketplaces, which operate like insurance exchanges where companies pitch plans in a competitive environment, have also generated losses for UnitedHealth Group, Humana and Blue Cross-Blue Shield insurer Anthem. United Healthcare has also said it will withdraw from the Ohio marketplace next year.
Ohio’s marketplace will remain one of the most competitive in the nation. Thirteen insurers filed to sell individual health plans next year to more than 240,000 consumers.
Officials at fast-growing CareSource, a downtown Dayton-based Medicaid managed care provider and private health insurer with operations in Ohio, Kentucky, Indiana and West Virginia, say they view the absence of Aetna and other competitors as an opportunity to grow share in the markets they abandon.
“We see these decisions as an opportunity for CareSource to offer a safety net of quality health care coverage options for the thousands of consumers impacted,” said Steve Ringel, president of the Ohio market for CareSource. “We believe Ohio and our other markets will remain competitive, and the value CareSource brings will remain attractive to our membership. We anticipate continued growth.”
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As a nonprofit, CareSource — which had about 76,000 members of its Just4Me brand marketplace plans in Ohio, and 124,000 customers in all four states at the beginning of the year — has an advantage over other marketplace competitors who have higher overhead costs, making it difficult for them to compete on price.
And surveys show price is the main factor influencing most consumers’ decisions to purchase health insurance in the marketplaces.
“Our goal is still to be the lowest-cost or second-lowest cost provider in the marketplace,” Ringle said, referring to CareSource’s marketplace offerings next year. “Our cost structure is lower than our for-profit competitors, which allows us to do that.”
While such competition may continue to lead to consolidation in the marketplaces in different states, nationwide enrollment is projected to continue to grow from the current 11 million consumers buying plans in the exchanges, said Kevin Counihan, who oversees the ACA marketplaces at the federal Centers for Medicare and Medicaid Services.
“Aetna’s decision to alter its marketplace participation does not change the fundamental fact that the Health Insurance Marketplace will continue to bring quality coverage to millions of Americans next year,” Counihan said.
Since the marketplaces launched in 2014, more than 800,000 Ohioans have signed up for marketplace or expanded Medicaid coverage under President Barack Obama’s signature health reform law.
Growth in the number of Ohioans with health insurance has helped push the state’s rate of those without insurance to its lowest level in more than a decade.
Ohio Health Insurance Marketplace, by the numbers:
243,715 - Total enrollment at the end of January
23,774 - Total enrollment in Dayton by the end of January
299,259 - Total number eligible to enroll in marketplace plans
206,000 - Estimated number of consumers eligible for premium tax-credit subsidies to apply toward cost of coverage
Source: U.S. Department of Health and Human Services