Insurance giant Aetna is pulling out of most ObamaCare exchanges

On Monday, large health insurer Aetna said that it is withdrawing from the ObamaCare exchange markets in two-thirds of the 778 counties where it was participating, keeping all its exchange offerings in just four states: Delaware, Virginia, Nebraska, and Iowa. Aetna CEO Mark Bertolini said that "as a strong supporter of public exchanges as a means to meet the needs of the uninsured, we regret having to make this decision," but that its 838,000 exchange customers were sicker than anticipated, driving up costs and making the exchanges unprofitable. Other large insurers, including United Health and Humana, have also said they will scale back their involvement in the exchanges in 2017.

"It seems increasingly clear that big, national insurers are having trouble competing in the ObamaCare marketplaces and making money," said Larry Levitt at the Kaiser Family Foundation. "Some insurers are still doing well, particularly those that historically served Medicaid beneficiaries." Aetna said Monday that it has lost $430 million in its individual policy unit since January 2014, when the ObamaCare exchanges opened. Some 11 million Americans have insurance through the exchange marketplaces, and they are the only place where consumers can get federal subsidies, making them a key component of the Affordable Care Act.

Some allies of President Obama tied Aetna's withdrawal to the Justice Department's decision last month to block the company's planned merger with Humana, plus Anthem's acquisition of Cigna. As late as May, Aetna said it planned to expand its ObamaCare exchange options, Sen. Elizabeth Warren (D-Mass.) said on Facebook last week, after Aetna announced it was considering this withdrawal. "Aetna may not like the Justice Department's decision to challenge its merger, and it has every right to fight that decision in court," she said, but "the health of the American people should not be used as bargaining chips to force the government to bend to one giant company's will."

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Several large insurers have complained about the program's risk-adjustment apparatus. "I think the market will stabilize, and perhaps Aetna and United will come back," Washington and Lee University law professor emeritus Timothy Jost tells CNNMoney. "But the market really needs support for another few years until it does, and since the majority in Congress is rooting for [the Affordable Care Act] to fail, it seems unlikely that the support will be forthcoming."