The leader of one of America’s largest insurers said Obamacare is collapsing in a death spiral, a day after another insurer bolted from the federal insurance exchanges.
Aetna CEO Mark Bertolini said the marketplaces are in a “death spiral” in pointed remarks Wednesday during a Wall Street Journal event. He added that more insurers likely would leave next year.
The comments come a day after Humana announced it would leave the last remaining states it offers plans in. Humana initially had offered plans in 15 states, but reduced it to 11 in 2017 and in 2018 will completely withdraw from the marketplaces.
Bertolini said Humana is likely just the beginning, saying that it is going to cost insurers more and more to offer plans on the marketplaces.
“That logic shows just how much the risk pools are deteriorating in the [Affordable Care Act] and the funding premium mechanisms,” he said. “I think you will see a lot more withdrawals this year.”
The death spiral refers to when too many sick people sign up for insurance and not enough healthy people sign up to compensate. Insurers are forced to raise prices to cover the claims from the sicker people.
Bertolini said that is what is happening to Obamacare’s marketplaces on the individual market, which is for people who don’t get insurance through their job.
“There isn’t enough money in the [Affordable Care Act] today as it is structured to support the population that needs to be served,” he said.
Aetna hasn’t made a decision about whether it will leave the marketplaces in 2018, with Bertolini saying a decision will be made by April when initial plans are due for government approval. Aetna decided to withdraw from more than 70 percent of its plan offerings for 2017 after big losses.
Bertolini denied that the pullout was in response to the federal government’s attempts to block a merger between Aetna and Humana. Both sides torpedoed the deal after a federal judge blocked the planned deal because of antitrust concerns.
“I had 450 million reasons last year why we should have gone out of the exchange,” Bertolini said, referring to the company’s losses.
The Trump administration sought to stabilize the marketplaces by issuing a sweeping proposed rule on Wednesday. The rule aims to clamp down on special enrollment periods and shorten the open enrollment period for Obamacare.
