After nearly $1 billion in losses last year, Humana, one of the
nation’s leading health insurance providers, announced July 21 it is
pulling out of Obamacare plans in nearly all states.
The announcement came the same day the Obama administration declared it
would take legal action against a multi-billion dollar merger between
Humana and another top-five health insurance provider, Aetna.
According to Humana, President Barack Obama’s signature healthcare
reforms could have a severe effect on the company, resulting in limited
revenue and “increasing the company’s medical and operating costs.”
Starting in 2017, Humana will provide individual plans in an estimated
156 counties across 11 states, compared to 1,351 counties across 19
states this year.
The news did not come as a surprise, given Humana’s warning earlier
this year about pulling out of Obamacare plans due to financial
concerns.
Other insurance companies also are suffering financial difficulties.
UnitedHealth Group said in April it would pull out of most Obamacare
marketplaces in 2017, withdrawing from at least 26 of its prior 34
states. UnitedHealth is the biggest health insurance provider in the
United States, and has said it lost $475 million on ACA exchanges last
year and could lose $500 million this year.
The Kaiser Family Foundation estimated UnitedHealth’s move would result
in higher insurance premiums in many states, including Alabama,
Arizona, Iowa, Nebraska, and North Carolina.
Both Humana and UnitedHealth have faced difficulties keeping down
medical costs for individuals buying coverage through the ACA.
“If you thought it was going to get fixed in a year or two, you’d stick
around,” said Robert Laszewksi with Health Policy and Strategy
Associates. “The implications of that are that the program just isn’t
working in its current form.”
Now Humana’s decision to restrict plans for 2017 could significantly impact consumer plan options on public exchanges.
The announcement from Humana came the same day the Department of
Justice filed lawsuits to block two health insurance company
mergers—Anthem Inc’s proposed takeover of Cigna and Aetna’s acquisition
of Humana.
In a landmark antitrust action, the Justice Department said the
multi-billion dollar mergers would reduce competition among insurance
companies and raise costs for consumers. Together, both Aetna and Humana
would become the largest U.S. controller of healthcare for the elderly.
Aetna vowed “to vigorously defend the companies’ pending merger,” which is worth $37 billion.
“If allowed to proceed, these mergers would fundamentally reshape the
health insurance industry,” said Attorney General Loretta Lynch. “They
would leave much of the multi trillion-dollar industry in the hands of
just three mammoth insurers.”
Lynch said if the “big five became the big three” it would have a severe financial impact for consumers.
But Humana has also said that in states where it remains, Obamacare
plan prices may increase as medical costs rise. Consumers might see
higher prices and fewer plan options when enrollment for 2017 ACA plans
starts on Nov. 1, just one week before the presidential election.
Courtesy: WORLD News Service
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