Cigna: On second thought, we're not expanding our Obamacare offerings

Cigna, one of the nation’s largest health insurers, announced Thursday that it will not be expanding into new Obamacare markets as previously announced. From Reuters:

Health insurer Cigna Corp said on Thursday it would not expand its individual Obamacare plans into more states next year, joining an industry pullback from the struggling business.

Cigna, which manages insurance plans for big companies and sells health plans on the government exchanges created under Obamacare, had planned to expand into 10 states from seven.

Cigna announced it was expanding into a few new markets back in July. At the time, the Hill reported it was “a countervailing force to some recent high profile exits by insurers.” Centers for Medicare and Medicaid Services (CMS) acting administrator Andy Slavitt said it was “big news.”

But Cigna’s announcement and a similar one by Anthem the same week in July were both appear to have been aimed at offering the Obama administration a “carrot” for allowing their proposed merger to continue. With no change in the government opposition to the merger, both companies seem to have dropped their faux-enthusiasm for the law.

Anthem announced yesterday that unless their position improves in 2017, they are likely to drop out of the Obamacare exchanges in 2018. Cigna hasn’t gone that far, yet, but it is pulling back from the proposed expansion.

All five of the largest insurers in the U.S. have either pulled back from the Obamacare exchange market or threatened to do so in the future unless something changes. UnitedHealth announced it was dropping out back in April after losses of $1.1 billion. Humana announced it was pulling out of most markets in July and Aetna announced it was backing away from the exchanges in August.

Declining competition has become a major problem for the law. An Associated Press story published last week based on data from Avalere Health found that roughly a third of U.S. counties would only have one insurer offering them plans next year. Obviously if Cigna and Anthem pull back that problem could get substantially worse.