The company said Wednesday that it won’t participate in the state’s individual market — either on the Obamacare exchange or outside of it — in 2018. Though it has greatly downsized its participation in Obamacare, Aetna said it could still lose more than $200 million in its individual market products this year. That’s on top of the nearly $700 billion it’s lost in the three years after the exchanges opened in 2014.
The move means Innovation Health, which Aetna formed through a joint venture with Washington D.C. metro-area insurer Inova in 2012, will also leave the Virginia market. In addition, UnitedHealth did not file with the Virginia’s insurance department to offer policies in the state next year.
According to Katherine Hempstead of the Robert Wood Johnson Foundation, Aetna’s decision will leave 25 counties in Virginia with only one remaining insurer. And given that Aetna is leaving because of losses, it’s likely the remaining insurer will need to raise premiums substantially if it plans to pick up all of Aetna’s sicker-than-expected customers.
Virgina is still much better than some other states. Aetna announced last month that it was pulling out of the exchange in Iowa. Earlier today, Medica, the last remaining insurer offering plans throughout Iowa announced it was likely to follow Aetna’s lead. If so, the entire state, with the exception of five counties, would be left without any insurer. Similarly, the exit of Humana in Tennessee could leave significant portions of the state with no insurer.
The real concern is that this could be just the beginning. Seeing an exodus of major insurers could spark a stampede for the exits in other states. And, to be fair, it could also convince some insurers that this is a rare opportunity to corner the market by jumping in to pick up all the people the big carriers are leaving behind. Of course, if the House passes an Obamacare repeal bill tomorrow that could play a significant role in what insurers are thinking about their future prospects on the Obamacare exchanges.
No one knows for certain what would happen if a state or region was left without a single insurer. It’s possible the Trump administration could work with the state to create some sort of last-minute alternative, but it hasn’t been tried before. Look for Democrats to start talking up the public option again soon.