By Anna Wilde Mathews 

Aetna Inc. became the second insurer this week to say it will exit the Affordable Care Act insurance marketplace in Iowa next year, in the latest sign that the industry is pulling back from the exchanges amid uncertainty about the future of the business.

Aetna's move came in the wake of an announcement Monday by Wellmark Blue Cross and Blue Shield, which said it would stop selling ACA plans in Iowa after losing about $90 million over three years. The pullouts leave two insurers still selling plans on the state's ACA exchange.

In February, Humana Inc. said it would stop selling exchange plans in the 11 states where it currently offers them. These decisions likely foreshadow a broader fraying of the ACA coverage map, as major insurers Anthem Inc., Molina Healthcare Inc. and Cigna Corp. have said they are reviewing their exchange offerings and may pull back without signs of increased stability. An analyst has suggested Anthem's withdrawal could be extensive, though the company itself hasn't offered new details on its plans and said it would "continue to actively pursue policy changes that will help with market stabilization."

Aetna said its move in Iowa came "as a result of financial risk and an uncertain outlook for the marketplace" and it was "still evaluating Aetna's 2018 individual product presence in our remaining states." Aetna currently offers exchange plans in four states -- Iowa, Delaware, Nebraska and Virginia -- a sharp reduction from its presence last year. It has more than 30,000 enrollees in Iowa.

Republican hopes of quickly passing a major health overhaul law are sputtering, and insurers are nervous about the posture of the Trump administration, which has sent mixed signals about its intent to prop up the exchanges.

The exchanges have proved a difficult business for many insurers, and several companies already pulled back this year after losses, including UnitedHealth Group Inc. and Aetna. Still, every U.S. county had at least one exchange insurer in 2017, partly due to efforts by the Obama administration to persuade companies to stick around.

Though the Trump administration has proposed a rule aimed at stabilizing the exchanges, which included several moves favored by insurers, it hasn't firmly and publicly committed to continuing federal payments of a subsidy that helps low-income ACA enrollees pay their deductibles and out-of-pocket costs. Without those payments, insurers have said that marketplace withdrawals and sharp rate increases become far more likely for next year.

Aetna's decision, in the wake of Wellmark's, creates heavy pressure on Iowa's other two exchange insurers -- typically, insurers are reluctant to be the last to withdraw, but they are also leery of enrolling consumers who led to significant losses for their departing competitors.

The remaining Iowa exchange insurers are Medica, a nonprofit that offers plans in every county, and Gundersen Health Plan, which sells exchange plans in five Iowa counties, according to the Kaiser Family Foundation. If both continued their current geographic footprints, no Iowa counties would be without an exchange insurer.

A spokesman for Medica said, "We are currently evaluating the situation and our options." A spokeswoman for Gundersen said its current plan is to participate in Iowa's insurance marketplace next year.

Iowa's insurance commissioner, Doug Ommen, a Republican, said officials were "deeply troubled by the angst and concern the Affordable Care Act is causing in Iowa" and that Congress needs to fix the problem.

Humana's departure left 16 counties in the Knoxville area of Tennessee with no exchange insurer, assuming other companies continue offering plans in their current locations. A spokesman for the Tennessee insurance regulator said that it has gotten no commitment yet that any insurer will enter the Knoxville region, and "we have no assurances that companies will remain in their existing market areas in the future."

He added that "absent any national direction, there could be Tennesseans who currently buy insurance who may not have any choice for insurance on the exchange in 2018." Tennessee's U.S. Sens. Lamar Alexander and Bob Corker, both Republicans, have introduced a bill that would tweak the ACA's rules with a goal of helping people who want exchange plans but don't have an insurer offering them in their region.

Write to Anna Wilde Mathews at anna.mathews@wsj.com

 

(END) Dow Jones Newswires

April 06, 2017 15:58 ET (19:58 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.
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