Though Aetna is set to participate in just three states’ Affordable Care Act exchanges next year, the major insurer is now saying that it might reduce its individual market participation even further.
"We continue to evaluate our footprint with a view toward significantly reducing our exposure to individual commercial products in 2018,” Aetna Chief Financial Officer Shawn Guertin said during the company’s fourth-quarter earnings call on Tuesday.
The insurer drastically reduced its exchange participation in 2017, selling plans in just four states. In early April, Aetna then announced that it would exit Iowa’s exchange in 2018, leaving it set to sell plans in just Delaware, Nebraska and Virginia next year. That announcement came just days after Wellmark Blue Cross and Blue Shield revealed that it would drop out of Iowa’s individual marketplace.
Driving Aetna’s suggestion that it may pull out of even more states is the fact that it expects to experience greater financial losses on its commercial insurance products than it previously anticipated for 2017, Guertin said. Thus, the insurer established a $110 million premium deficiency reserve.
Overall in the first quarter, Aetna announced a net loss of $381 million, or $1.11 per share—primarily due to losses associated with the breakup of its proposed acquisition of Humana. The two insurers ended their merger contract earlier this year following a federal judge’s ruling that the deal violated antitrust laws.
Aetna’s Medicare and Medicaid business, however, continues to grow, helping offset its continuing losses in its individual commercial business. Aetna increased its Medicaid membership by 62,000 compared to Q1 2016, and it reported sequential individual Medicare Advantage membership growth of nearly 13%, exceeding overall MA program growth.
“This strong start to the year has enabled Aetna to absorb continued pressure from our individual commercial products while increasing investment in our growth initiatives and raising our full-year 2017 earnings per share projections,” CEO Mark Bertolini said in the insurer’s earnings announcement (PDF).