Tag Archives: Health exchange

Aetna CEO Has `Serious Concerns’ About Obamacare Sustainability

The head of the third-biggest U.S. health insurer said he has “serious concerns” about whether or not Obamacare’s new markets are sustainable, echoing criticism from other top for-profit insurers.

“We continue to have serious concerns about the sustainability of the public exchanges,” Aetna Inc. Chief Executive Officer Mark Bertolini said on a call Monday while discussing the company’s fourth-quarter results. “We remain concerned about the overall stability of the risk pool.”

Large U.S. health insurers have faced a rocky start in the Patient Protection and Affordable Care Act, which in 2014 opened up new markets where millions of Americans buy coverage, often with tax subsidies to help them afford it. Aetna is one of the biggest insurers in Obamacare and, like its rivals UnitedHealth Group Inc. and Anthem Inc., has struggled to make a profit in the business.

Aetna’s 1 million individual commercial members make up 4.3 percent of its total membership, as of Dec. 31. Of those, 750,000 are people who signed up through the exchanges. The insurer expects total membership to remain roughly flat this year. Pretax operating losses from the individual business were about 3 percent to 4 percent last year, though should improve this year, Aetna Chief Financial Officer Shawn Guertin said Monday.

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Jeffrey R. Ungvary President

Jeffrey R. Ungvary

Small Businesses Sending Employees to The Exchange

Brian Adams, who sells fireplaces in Indianapolis, is like many of the nation’s small-business owners. As the cost of providing health benefits has climbed, he has struggled to afford coverage for his employees — a problem the new health care law was designed, in part, to address.

But a year after the law’s introduction of the insurance exchanges, provisions that were supposed to help small businesses offer employee health benefits are largely seen as a failure. And Mr. Adams, like many of his fellow business owners, is sending employees to the exchanges to buy their own coverage instead.

Nancy Smith, who runs the Great Arizona Puppet Theater in Phoenix, made a similar decision. Her business employs only a handful of people who need insurance, and she was able to offer only plans with high deductibles. She and her employees decided buying individual policies made the most sense.

“Everyone wanted to do it because our costs were too high,” she said.

Most of the focus on the Affordable Care Act has been on whether individuals can find affordable coverage through the online marketplaces. But the law also had the goal of creating a robust insurance market for small businesses by making tax credits available to businesses that provide coverage and creating small-business exchanges where companies could more easily find low-cost plans.

The small-business exchanges were barely functional in most states last year, and it remains to be seen whether the Obama administration will manage to stop the steady decline in the number of employers offering coverage to their workers. The administration is poised to try again when open enrollment begins on Nov. 15.

Federal officials say they do not know how many small businesses signed up for coverage in the small-business exchanges, but the numbers are likely to be very small. In California, for example, only 12,000 people were enrolled through the state’s small-business exchange, compared with more than a million who enrolled as individuals there. To date, few businesses have availed themselves of the tax credits available for purchasing coverage for low-wage workers.

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Jeffrey R. Ungvary President

Jeffrey R. Ungvary