Aetna to stay in many off-exchange individual health markets

Morbidity chess

The Affordable Care Act now requires issuers of all new individual major medical policies to sell coverage without taking the applicants’ health status into account, and to price the coverage without considering any factors other than the enrollee’s location, age and use of tobacco products.

Only consumers who buy coverage through the public exchange system can get the ACA premium tax credit subsidies and the ACA cost-sharing reduction subsidies. The subsidies cut out-of-pocket costs sharply for enrollees who earn less than 250 percent of the federal poverty level, but the subsidies provide only a little help for enrollees who earn more than about 300 percent to 400 percent of the federal poverty level. The subsidies provide no help for enrollees who earn more than 400 percent of the federal poverty level.

If Aetna stays in the off-exchange individual health market, it may be able to keep most of the current enrollees who earn more than about 300 percent of the federal poverty level. It is likely to lose most of the enrollees who earn less than that.

Some carriers that compete in the Medicaid plan market say their ACA exchange plan enrollees are healthier than their Medicaid plan enrollees.

Earlier this month, Bertolini complained during a conference call with securities analysts that Aetna has seen hospitals and drug companies making concerted efforts to help patients with expensive health problems get exchange plan coverage.

“We now believe we have third parties paying premiums for special interest groups, both in small group and individual, that are supporting people getting access to these services,” Bertolini said at the time.

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Patients and laypeople may see efforts to help sick people pay health insurance premiums as a kind thing to do, but insurers see those efforts as an effort to skew the risk pool in a way that gives insurers extra, unexpected responsibility for medical claim risk, while sharply increasing revenue for doctors, hospitals and drug makers.

By getting out of the exchange market, Aetna may be able to reduce its exposure to low-income people with serious, expensive health problems who are getting help from health care providers with paying their premiums.

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