In another serious blow to the Affordable Care Act, Aetna announced late Monday that it was pulling out of 11 of 15 states where it has been selling insurance on Obamacare exchanges in the face of hundreds of millions of dollars in losses in recent years.
The program enacted in 2010 has survived numerous political and legal challenges and has strong backing from Hillary Clinton, the Democratic presidential frontrunner who has vowed to build on Obamacare, assuming she defeats Republican Donald Trump in November.
However, Obamacare has been long wracked by financial and economic problems that have forced nearly half of its non-profit co-ops to go out of business and prompted insurance giant United Healthcare and Humana to pull out of some of the markets.
Related: Obamacare Insurers Are Looking for a Taxpayer Bailout
Mark Bertolini, CEO of Aetna and a supporter of the ACA, said earlier this month that massive losses have forced his company to rethink its commitment to Obamacare in 2017. Today the health insurance giant announced it would cease selling individual Obamacare policies next year in 11 of 15 states, including North Carolina and Ohio. Aetna will continue to sell plans in Iowa, Delaware, Nebraska and Virginia.
The company said it would also sell individual health insurance policies outside of the federal and state-run government exchanges, which have proved to be a financial nightmare for the company because premiums failed to keep up with the mounting cost of coverage and the government’s promises of covering unexpected losses never measured up.
Beginning in early 2017, Aetna says it will be providing insurance through Obamacare in just 242 counties, down from 778 this year.
Bertolini said in a statement, “Following a thorough business review and in light of a second-quarter pretax loss of $200 million and total pretax losses of more than $430 million since January 2014 in our individual products, we have decided to reduce our individual public exchange presence in 2017, which will limit our financial exposure moving forward.
He added that “as a strong supporter of public exchanges as a means to meet the needs of the uninsured,” Aetna regrets having to pull back.
