Aetna may get $50 million in PPACA reinsurance money

Aetna did not release figures for total individual policy enrollment, or total PPACA-compliant individual policy enrollment, but the figures published imply that it has between 600,000 and 1 million individual coverage holders. Qualifying for $50 million in reinsurance program payments means that Aetna had between 300 and 1,200 insureds with enough known claims to reach the $45,000 attachment point.

The U.S. Department of Health and Human Services (HHS) is charging Aetna and other insurers and self-insured plan sponsors $63 per enrollee per year for the reinsurance program. Aetna will pay a total of about $600 million in fees for the reinsurance program for the first half of the year.

All of Aetna’s non-grandfathered individual and small-group plans are eligible for the PPACA risk-adjustment program, which is supposed to use cash from plans with relatively low-risk enrollees to compensate plans with relatively high-risk plans.

The QHPs that Aetna sold through the PPACA exchange system are eligible for a third program — the PPACA risk corridor program. The risk corridor program is supposed to use cash from health insurers with good underwriting results to help QHP issuers with weak operating results.

Aetna does not yet have any thoughts on what it might get from, or pay for, the risk corridor and risk adjustment programs, executives said.

Aetna President Mark Bertolini said the company believes small employers will move away from offering health benefits. The percentage of small employers offering health benefits has fallen to 42 percent this year, from 44 percent last year, but that represents a continuation of a long-term trend, he said. He said his company sees no sign that the arrival of the PPACA exchange system and PPACA commercial insurance rules has accelerated the shift or led to many small employers dumping workers into the exchange system.

He also sees no evidence that competitors are making heroic efforts to hang on to small-group business.

“We see very rational pricing,” Bertolini said.

Some health insurance market watchers have suggested that small employers will escape PPACA rules by self-insuring. Bertolini said he thinks small employers are more likely to cope with economic pressure by using private exchange programs than by self-insuring.