Health insurance giant Aetna announced Wednesday that it was pulling out of the Obamacare exchange in Virginia, citing massive losses and uncertainty ahead.
"Despite significantly reducing our exchange footprint, our individual commercial products could potentially lose more than $200 million in 2017," Aetna spokesman T.J. Crawford said in an email. "Based on that financial risk, and growing uncertainty in the marketplace, we will not offer on- or off-exchange individual plans in Virginia for 2018. We will communicate decisions on our remaining states as appropriate."
Aetna participates in two other exchanges, after dramatically reducing its participation for 2017 soon after the Obama administration's Department of Justice challenged the company's planned merger with Humana. The federal judge who decided the antitrust case, effectively blocking and terminating the merger, wrote in his opinion that Aetna appeared to reduce its exchange participation as backlash against the Obama administration's attempt to block the merger. Aetna has maintained its decision to leave the exchanges was based on $450 million in losses it suffered in 2015 on account its exchange participation. The merger termination cost the company $381 million in losses so far, according to its first-quarter earnings report.
Planning for whether to participate in the exchanges in 2017, which involves deciding how much to charge for premiums, several insurers have said they are concerned about what lies ahead as Republicans debate how to repeal and replace Obamacare. In particular, the Trump administration will not say if it will continue to pay out billions of dollars to insurers under Obamacare to help them reduce out-of-pocket medical costs for consumers.
Companies have lost money in the exchanges for a variety of reasons, including that not enough young, healthy people enrolled in the plans, which are subsidized by the federal government, to balance out the risk pool. Even though health insurance companies have profited overall since the implementation of Obamacare, the exchange market has resulted in millions in losses for many. Aetna said in an email that it lost $100 million during 2014, the first year of implementation and $130 million in 2015.