Humana’s individual business, which sells plans under President Barack Obama’s Affordable Care Act, has been a drag on results, and the company still expects to lose money this year. Humana sells plans in 15 states.
Humana said it is in the process of finalizing the sort of insurance plans it will offer in the business next year, but is considering a number of changes, including exiting certain states or products. It also said it may raise premium prices.
Here is the key paragraph from Humana’s press release:
Humana is in the process of finalizing plans for its ACA-compliant individual commercial medical market offerings in 2017. Humana anticipates proposing a number of changes to retain a viable product for individual consumers, where feasible, and address persistent risk selection challenges. Such changes may include certain statewide market and product exits both on and off exchange, service area reductions and pricing commensurate with anticipated levels of risk by state.
Humana is currently being bought out by Aetna. Last month Aetna’s CEO sent some mixed messages on the future of Obamacare. On the positive side he called it a “good investment.” On the other hand, he also said, “We need younger people to join, we need more of the uninsured to join, we need a different set of products, more rating flexibility, a broader range of rates for people to buy from and more markets that we have strong lower-cost control in so that we can offer those products on an affordable basis.” That’s a long list of changes and, importantly, Aetna’s CEO admits these are “legislative changes.” In other words, congress would need to act in order to make these changes happen. That seems unlikely so long as we continue to have divided government.
Meanwhile, NPR published a story yesterday showing what Obamacare plans are really like for some families:
[Renee Powell] shopped for insurance through the Obamacare exchange and learned that rates in her new area were much higher than they had been in Oklahoma City. She bought a health plan from Blue Cross and Blue Shield of Oklahoma for $750 a month with a manageable deductible.
Then last year Blue Cross eliminated that plan — which is pretty common as insurers adjust to the Obamacare markets — and Powell was forced to buy the more expensive policy with a deductible of $3,000 for each person in her family. The insurance pays for checkups and prescriptions, but if anyone gets sick, Powell has to pay the full doctor bill until the deductibles are met.
Powell has spent about $4,400 so far this year in premiums for that Blue Cross policy, and she said the plan has only paid a few dollars for antibiotics one of her boys needed when he was sick.
“I felt like we were paying money to the insurance company so that they could just sit on it and put it in stock,” she said.
As the NPR story makes clear, Powell is now spending more on “affordable” insurance than on her rent and yet she is seeing almost no real benefit. It’s a lot of money to pay for what amounts to a catastrophic insurance policy.