The collapse of Obamacare continues apace. Earlier today I wrote about the dissolution of two health insurance mega-mergers including the one between Aetna and Humana. This afternoon, Humana announced its plans for moving forward as an independent entity. Those plans do not include participating in Obamacare exchanges next year:
Regarding the company’s individual commercial medical coverage (Individual Commercial), substantially all of which is offered on-exchange through the federal Marketplaces, Humana has worked over the past several years to address market and programmatic challenges in order to keep coverage options available wherever it could offer a viable product. This has included pursuing business changes, such as modifying networks, restructuring product offerings, reducing the company’s geographic footprint and increasing premiums.
All of these actions were taken with the expectation that the company’s Individual Commercial business would stabilize to the point where the company could continue to participate in the program. However, based on its initial analysis of data associated with the company’s healthcare exchange membership following the 2017 open enrollment period, Humana is seeing further signs of an unbalanced risk pool. Therefore, the company has decided that it cannot continue to offer this coverage for 2018. Through the remainder of 2017, Humana remains committed to serving its current members across 11 states where it offers Individual Commercial products. And, as it has done in the past, Humana will work closely with its state partners as it navigates this process.
This move is not completely unexpected. Humana began to hint last May that it was considering pulling back from the exchanges. Then in July, only hours after AG Lynch announced a lawsuit against the company’s merger with Aetna, Humana announced it was dropping most of its Obamacare business. The company went from offering plans in over 1,300 counties in 19 states to just 156 counties in 11 states.
Still, the decision is a blow to the struggling health insurance program. The really bad news is the reasoning the company offered. It’s not precisely clear what it means by “further signs of an unbalanced risk pool” but the fact that enrollment appears to have declined this year may be part of it. In any case, whatever Humana is seeing must be obvious to the other big players in the industry as well. Those who choose to stay in the market next year (assuming it hasn’t been repealed) can expect to pick up all of the sicker-than-expected customers Humana is now leaving behind. So expect another round of premium spikes next year for whoever is left on the exchanges.
President Trump was quick to capitalize on the news:
Obamacare continues to fail. Humana to pull out in 2018. Will repeal, replace & save healthcare for ALL Americans. https://t.co/glWEQ0lNR4
— Donald J. Trump (@realDonaldTrump) February 14, 2017
The big question now: Will more insurers drop out of the Obamacare exchanges even before Republicans can move on repeal?