Health insurer Aetna announced Thursday that it would completely withdraw from the Obamacare exchanges in 2018, after seeing its profits soar from reducing its participation this year.
The company said during an earnings call that it was withdrawing from the exchange in Nevada, the last state it had considered staying in. Aetna was leaving the possibility open because it was applying for a Medicaid managed care contract, and the state gives extra consideration to insurers that participate in both programs.
During its second-quarter earnings call on Thursday, however, Aetna said it was not moving forward with the recently awarded contract and would be leaving the exchange as well.
"Our 2018 participation was required based on a Medicaid contract with the state," spokesman T.J. Crawford said in an email. "As a result of terminating that contract for unrelated reasons, we will not have a presence on the individual exchange in Nevada."
Aetna notified state officials about its intent to no longer participate in the Medicaid managed care program in a letter sent July 1, citing low enrollment."This is far less than the critical number needed to ensure a viable Medicaid plan capable of delivering quality care and competitive programs," the chief executive officer of the program wrote, citing an enrollment figure of 1,600.
Aetna's second-quarter profit jumped 52 percent, far ahead of projections, and the company plans to invest in more Medicare Advantage plans.
Aetna has been gradually withdrawing from the Obamacare exchanges. It had decided to pull out of the exchanges in other states because it lost $700 million between 2014 and 2016 and was projected to lose $200 million in 2017 despite having already significantly reduced its participation in the exchanges to only four states.
A disproportionate number of unhealthy customers have signed up for the exchanges, which provide tax subsidies to pay for insurance, causing unbalanced risk pools for many insurers. Aetna also has cited uncertainty over the future of the law and over whether it will receive federal payments as a contributing factor to its decision.
Several insurers began leaving the exchanges last year, before uncertainty over the future of the law arose. Aetna, in particular, drew widespread attention last year when it announced it would be pulling out of 11 states where it sold plans on the exchanges. A federal judge wrote in an opinion that Aetna appeared to make the move as retaliation against the Obama administration's attempt to block its proposed multibillion-dollar merger with Humana, while the company has maintained that its decision was based on massive losses.