Insurance giant Aetna will stop selling health insurance through most of the exchanges created by the Affordable Care Act in 2017 because the company said it is losing money in many of those markets.
On Monday, Aetna said it will sell individual insurance policies in only 242 counties in four states, down almost 70 percent from the 778 counties in 15 states where the company markets Obamacare plans this year.
The decision is a blow to President Obama's signature health care law. Most insurers selling plans through the exchanges have been losing money because the people getting insurance under Obamacare have been sicker than forecast.
But Aetna, which lost $430 million on the Obamacare plans in the first half of the year, said it may re-enter the markets in the future.
"We will continue to evaluate our participation in individual public exchanges while gaining additional insight from the counties where we will maintain our presence, and may expand our footprint in the future should there be meaningful exchange-related policy improvements," CEO Mark Bertolini said in a statement.
Aetna, which covers about 900,000 people through the exchanges, is the third major insurer to pull back from the Obamacare marketplaces. UnitedHealth Group said in April it planned to pull out of ACA marketplaces in most states, and just last month Humana, which covers about 800,000 people, said it will cut back its offerings to just a handful of counties.
All the companies said they are losing money on the plans. The Department of Health and Human Services has argued that companies have themselves to blame because they set premiums too low. The companies will be able to adjust the premiums in the future.
"Aetna's decision to alter its Marketplace participation does not change the fundamental fact that the Health Insurance Marketplace will continue to bring quality coverage to millions of Americans next year and every year after that," said Kevin Counihan, CEO of HealthCare.gov, the federal insurance exchange.
In all, about 11 million people have bought insurance through the exchanges.
A spokesman for HHS said Aetna's decision was an about-face from its earlier statements about the Obamacare exchanges.
In April, Bertolini called the marketplace plans "a good investment" because it would have cost the company far more than $430 million to try to attract that many customers.
"If we were to build out 15 markets, it would cost us somewhere between $600 million to $750 million to enter those markets and build out the capabilities necessary to grow that membership," he said on the company's April earnings conference call with analysts.
Aetna's announcement comes less than a month after the Justice Department sued to stop the company's planned merger with Humana, arguing that the combination would hurt competition. At the same time, the government also sued to block Anthem from purchasing Cigna.
Sen. Elizabeth Warren, a Massachusetts Democrat, suggested Aetna's change of heart was in response to the Justice Department's action. In a post on her Facebook page last week, Warren questioned the company's motives after it first hinted that it was considering cutting its participation in Obamacare.
"The health of the American people should not be used as a bargaining chip to force the government to bend to one giant company's will," she said.
Aetna spokesman T.J. Crawford didn't immediately respond to a request for comment on Warren's statement.
HHS said last week that the per-member health care costs for people covered through the exchanges remained stable from 2014-2015. If that trend continues, insurers should be able to set premiums that better reflect the actual costs of covering people under Obamacare.
"The next ACA open enrollment is key," tweeted Larry Levitt, a senior vice president at the Kaiser Family Foundation. If insurance sign-ups increase, then deeper concerns about Obamacare will fade. "If not, expect a debate about fixes to the law," he wrote.