There was so much big news last Thursday, the day Trump accepted the nomination, that this significant Obamacare story got buried. Humana health care has announced it is pulling out of most Obamacare exchanges. From Politico:
The decision means the company will only offer individual plans in 156 counties in 11 states, down from 1,351 counties across 19 states this year. It had sold plans on Affordable Care Act exchanges in 15 states this year.
That’s quite a pull back, from 1,351 counties to just 156. What’s particularly noteworthy about the decsion is the timing. From the Hill:
Humana’s decision to exit “substantially all” of the state exchanges comes the same day that the Obama administration announced it would step in to block a multibillion-dollar merger between Humana and Aetna.
The announcement by Humana came literally hours after the DOJ announced it would attempt to black the merger, though as I noted here there was advance word the decision was coming. Here’s the NY Times:
United States Attorney General Loretta E. Lynch announced that the government had filed lawsuits to block the deals, between Aetna and Humana and Anthem and Cigna.The proposed mergers, she said, “would leave much of the multitrillion-dollar health insurance industry in the hands of three mammoth insurance companies.”
“If these mergers were to take place, the competition among insurers that has pushed them to provide lower premiums, higher-quality care and better benefits would be eliminated,” she said.
Why is this significant? Because Humana and other big insurers have been losing millions on the Obamacare exchanges. The question is why they haven’t already followed United Health’s lead and dropped out.
One possible answer is that Humana was trying to avoid upsetting federal regulators who were still considering the fate of their proposed mega-merger with Aetna. Since United Health wasn’t involved in any such merger, it was free to act without concern for how regulators might respond.
Back in May, Reuters reported there were signs that Humana was reconsidering its commitment to the exchanges. Now that the DOJ is trying to stop the merger and Humana is out of most markets, it’s as if a wrestling match between the insurer and the government has broken out into the open.
With all the political news last week, there was surprisingly little reaction to the Humana decision. Back when UnitedHealth pulled out the word from Obamacare supporters was that it was nothing to worry about because it was a one-off. That’s no longer the case.