Citing financial losses, Aetna is reducing its participation in Marketplace exchanges from 15 to four. Specifically, in 2017 the nation’s third-largest health insurer will offer coverage in Delaware, Iowa, Nebraska and Virginia exchanges only, although it said it would offer off-exchange individual plans in most of the counties it is exiting.

Aetna said it has lost $430 million on its individual plans since January 2014. According to CEO Mark Bertolini, there aren’t enough healthy enrollees to offset the cost of covering those who require high-cost care. 

Of note, Bertolini told the U.S. Department of Justice (DOJ) in July that Aetna would reduce its exchange participation if the proposed merger with Humana were not permitted. Conversely, he said if the merger were allowed to proceed, Aetna would consider supporting additional exchange coverage in the future. As previously reported, the DOJ subsequently sued to block the merger.

Incidentally, Aetna’s reported year-over-year Q2 revenue was up 5 percent in 2016, at $15.95 billion, and the insurer’s net income was up $59 million for the same period, at $790.8 million.

UnitedHealth Group and Humana recently announced plans to substantially decrease their exchange participation as well. Now, with Aetna’s departure, some exchanges, such as in Arizona’s Pinal County, could end up with no insurers offering plans in 2017. 

And late last week, Scott & White Health Plan, the insurance arm of Dallas-based Baylor Scott & White Health, announced that it would no longer participate in the federal exchanges.

Kaiser Family Foundation’s Cynthia Cox said one in four counties across the U.S. could have just one insurer participating in the exchanges next year. In fact, entire states, such as South Carolina and Alabama, may have only one insurer offering coverage through the exchanges. 

Other large insurers, like Anthem and Cigna, are also reporting losses stemming from the exchanges, yet Cigna intends to add three new states in 2017. Anthem previously said if the DOJ were to permit its merger with Cigna, it would increase its exchange presence by adding nine new states.

Along with the exchange issues, 16 of the 23 federally financed health insurance co-ops are no longer in business, noted, and all but one of the seven remaining co-ops are struggling financially.

Our Take: Once again Obamacare is on its deathbed, or so the TV pundits would have you believe. 

We won’t take the bait. As we have written about previously, many payers like Florida Blue have figured out a way to offer an exchange product profitably. They leverage narrow networks and push premiums as high as allowable, a one-two punch that’s a requirement to be in the exchange business.

And generally, while the scalebacks are certainly not a positive indicator, Katherine Hempstead, a senior adviser at the Robert Wood Johnson Foundation, pointed out that the national insurers have not traditionally been the largest part of the exchanges. 

What everyone was talking about last week was the revelation that Bertolini warned the DOJ back in July that Aetna would pull support from the exchanges if the department attempted to block the merger. (But Aetna would enthusiastically would support the exchanges if they were left alone.)

Threatening the federal government? That takes stones. 

The war of words is far from over.

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