Humana to Exit Obamacare Exchanges

Company’s move may herald things to come

Humana has announced that it would no longer offer health insurance coverage in the state marketplaces created under the Patient Protection and Affordable Care Act (PPACA), becoming the first major insurer to say “no” to selling individual plans on the public exchanges for 2018, according to an article in The New York Times. President Trump immediately Twittered: “Obamacare continues to fail.”

Several other major insurers have said they can’t begin to decide whether to offer coverage next year until the Trump administration clarifies if and how it plans to change the rules.

Humana has steadily scaled back its presence on the exchanges, selling policies for 2017 in only 11 states, according to the Times. In early January, the company said the number of its customers buying coverage through the exchanges had dropped to approximately 150,000––a tiny fraction of the roughly 12 million individuals who initially signed up for coverage through the exchanges.

The company said that it saw no evidence that the market was improving. Rather, there were “further signs of an unbalanced risk pool,” as customers with expensive medical conditions continued to enroll as compared with healthy people.

Humana’s move could be a harbinger of things to come, Dr. Sabrina Corlette, a research professor at Georgetown University, told the Times. She warned that the lack of clarity from Congress and the Trump administration could result in an exodus by insurers.

“They’ve been pulling out of the market for a couple of years,” said Gary Claxton, a policy analyst for the Kaiser Family Foundation, who said it was not clear how much the current uncertainty might have affected the company’s thinking.

In related news, Aetna chief executive Mark Bertolini told a Wall Street Journal conference that the individual Obamacare exchanges are in a “death spiral,” where rising premiums push out healthy customers and leave only the sickest customers behind, which then drives up premium rates further. He said that 2017 enrollment in individual plans showed early signs of an unbalanced pool of healthy and sick customers.

Sources: The New York Times; February 15, 2017; and Reuters; February 15, 2017.