“I think the decision making that we have to make right now has to be based on the reality as it is today,” Aetna Chief Financial Officer Shawn Guertin said in an interview on Tuesday after reporting it would lose $200 million on the business this year and one day before the company announced it would pull out of the Virginia market for 2018.
Molina HealthCare Corp and Anthem Inc have also said in the past week that they need to have resolution on issues like the government subsidies and the individual mandate settled. Together they help build a balanced pool of healthy and sick people that enables insurers to keep prices down.
When only half the number of people signed up compared to expectations, and prices pushing the young and healthy to forego insurances, the market has already been a loss maker for many insurers.
Insurers who are choosing to stay in the market are dealing with uncertainty about the subsidy payments – estimated to be about a 20 percent hit to premiums next year – by raising rates or submitting two sets of rates to states that allow them, like California.
But there are bigger issues that could decrease competition and leave Americans in some areas with no insurer next year – a version of “the death spiral” President Donald Trump tweeted about on Thursday.
“Are the exchanges going to be there in 5 years and if yes, what will they look like?” said Dan Mendelson, head of healthcare consultancy Avalere Health. “The program needs some level of competition to operate effectively.”
