Humana to exit ACA exchanges in 2018

Humana says it will stop offering individual market plans in 2018, becoming the first major insurer to pull out of the exchanges entirely after this year.

Based on an initial analysis of its Affordable Care Act exchange membership after the 2017 open enrollment period, Humana is “seeing further signs of an unbalanced risk pool,” CEO Bruce Broussard said on an earnings call with analysts Tuesday. 

“Therefore, we’ve decided that we can’t continue to offer this coverage in 2018,” he said.

Humana has already meaningfully scaled back its individual market presence this year, including exiting substantially all of its off-exchange business, said Brian Kane, the company’s senior vice president and chief financial officer. As of Jan. 1, the company had about 152,000 ACA-compliant lives.

Beyond reducing its geographic footprint, Humana has also tried various strategies to make its individual market business profitable, including modifying networks, restructuring product offerings and increasing premiums, Broussard said. Even so, Kane said the insurer expects to lose about $45 million in its ACA-compliant business.

For the rest of 2017, Humana will continue to serve members in the 11 states where it offers individual commercial products, Broussard said.

Though Humana is the first insurer to pull out of the exchanges entirely in 2018, Aetna CEO Mark Bertolini has already said the company will not re-enter any of the individual markets it left in 2017. And Anthem CEO Joseph Swedish has said that the insurer may consider exiting the exchanges if it does "not see clear evidence of an improving environment.”

In addition, insurance industry groups have warned lawmakers that the uncertainty surrounding the fate of the ACA under Republicans could cause many insurers to exit the marketplaces in 2018, as plans have to set their prices in the spring.

President Donald Trump, however, took Humana’s decision to pull out of the exchanges next year as another sign that the ACA is failing: