Health insurance giant Aetna has submitted rates to sell health plans on the Obamacare exchange in Nevada, after announcing in May that it did not plan on participating in the program at all for 2018.
“We’ve filed rates based on a contractual obligation with the state, but no final decision on our participation has been made,” an Aetna spokesman told the Washington Examiner.
Part of the reason Aetna is considering participating in Nevada is because the state is considering bids from insurers to run its Medicaid managed care system. The state gives extra weight in the bidding process to companies that are in the exchange.
It’s possible Aetna will decide not to participate in the exchange if it loses the Medicaid bid, as the company has previously said that the exchange programs have created massive losses for them. The company will likely have several months to decide because states are offering some flexibility given the uncertainty ahead on Obamacare.
As a cost-saving measure, states have increasingly been contracting with private health insurance companies to manage their Medicaid programs, which generally cover low-income people. The setup has been a financial boon for insurers, who receive payments for each member enrolled per month.
The Medicaid rolls may soon grow in Nevada, since a bill has reached Republican Gov. Brian Sandoval’s desk that would allow more people in the state to participate in the program.
Aetna had decided to pull out of the exchanges 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.
The reason for the losses, Aetna said at the time, came from structural issues within the exchanges “that have led to co-op failures and carrier exits, and subsequent risk pool deterioration.”
Aetna had also cited uncertainty about the future of Obamacare when it announced it would be exiting the exchange in Virginia. Several other insurers have done the same, saying they do not know whether the Trump administration will enforce the individual mandate obligating people to buy insurance or pay a fine, or whether the administration will pay out billions of dollars in subsidies to insurers.
Several insurers had already begun exiting the exchanges last year, before uncertainty over the future of the law. 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.
