One of the nation’s largest health insurers has announced it is pulling out of South Carolina’s federal health insurance exchanges after this year. The announcement was a blow for the key component of the 2009 Affordable Care Act that offers lower-priced insurance options.
The decision by Connecticut-based Aetna Health also leaves only two carriers on South Carolina’s exchange that have indicated they will return next year. The exchange was created in 2014 as part of the 2009 law, also known by opponents as “Obamacare.”
Aetna announced Tuesday it will pull its plans from all but four states, citing more than $430 million in losses since January 2014. The company operates in South Carolina’s exchanges under the name “Coventry.” Aetna announced it will reduce its individual public exchange participation down to Delaware, Iowa, Nebraska and Virginia. The company said it will continue to offer individual plans that don’t meet the stricter requirements of the exchanges.
CEO Mark Bertolini said in a statement the company regrets having to make the decision, but that the patients enrolling on the plans had become increasingly higher-risk and expensive for the company to continue offering affordable options. “Providing affordable, high-quality health care options to consumers is not possible without a balanced risk pool,” Bertolini said. “This population dynamic… results in substantial upward pressure on premiums and creates significant sustainability concerns.”
The announcement does not affect current Aetna plans through the rest of this year. However, those enrolled on the exchanges with Coventry will need to find a new plan when open enrollment begins again this fall. Coventry only covered about 8,000 individuals in South Carolina out of more than 216,000 total enrollees on the exchange.
South Carolina Department of Insurance director Raymond Farmer said his agency was “surprised” by the announcement, since Aetna had already filed its rate plans for next year and was nearing the end of the review process.
“We hate to see any company withdraw from the marketplace, but they were not the largest company here,” he told South Carolina Radio Network.
Aetna is the second major provider to withdraw from South Carolina’s exchanges. Consumer’s Choice healthcare cooperative was forced out after it went insolvent in 2015, blaming lower federal subsidies than had been promised to cover their losses. The state’s guaranty fund ended up having to assess roughly $45 million to cover claims from Consumer’s Choice members who lost their coverage after the co-op went into receivership.
United Healthcare announced in May it will also pull out of the exchanges, leaving only Blue Cross Blue Shield and Blue Choice health care plans for next year.
Farmer, who was appointed to the position by Gov. Nikki Haley in 2012, said he believes the financial struggles of companies on state exchanges nationwide is evidence the Affordable Care Act cannot work without reforms. “