Humana to Stop Selling Health Plans on Obamacare Marketplace
By Noam N. Levey and Melody Petersen
Humana Inc., one of the nation's largest health insurers, will stop selling Obamacare health plans next year, the company announced Tuesday. The move threatens to rattle jittery insurance markets and further complicate Republicans' push to repeal and replace the Affordable Care Act.
The company attributed its action to mounting losses caused by sicker-than-expected consumers. It is the first major insurer to pull back completely amid the mounting uncertainty over the GOP's still undefined health care plans, though other leading health plans have exited marketplaces over the last year, citing losses.
Humana's move will also probably mean that some 150,000 policy holders in 11 states where Humana sells Obamacare plans will have to switch carriers in 2018; some may be left without any alternative.
Humana, based in Louisville, Ky., is a relatively small player in the Obamacare marketplaces, which are expected to serve about 11 million people this year.
Gerald Kominski, director of the University of California, Los Angeles' Center for Health Policy Research, said Humana's decision was not unexpected.
Humana's exit should not affect customers in most parts of the country. But the company is a leading source of coverage in some regions, including Tennessee, which has one of the shakiest markets. The pullout will leave no insurer in 16 Tennessee counties in 2018, according to the nonprofit Kaiser Family Foundation, which is tracking marketplace participation.
The marketplaces, a pillar of the health care law, allow Americans who do not get coverage through an employer to shop for plans that must meet basic standards. They cannot turn away patients who are sick. Low- and moderate-income consumers can qualify for government subsidies to offset the cost of their premiums.
There have been widespread concerns over the last year that the markets could collapse as insurers raised premiums sharply in the face of more costly than expected patients.
Many experts, including leading insurance industry officials, do not believe such a collapse is inevitable. And enrollment for 2017 appears to be holding relatively steady compared with last year.
But like other analysts, Kominski said Humana's decision "will introduce another degree of uncertainty."
There were already signs Tuesday that it was contributing to the escalating partisan firestorm over the future of the 2010 health care law.
President Donald Trump quickly cast Humana's exit as evidence the law is faltering, an argument he and other Republicans have been trying to make to bolster their struggling repeal campaign.
"Obamacare continues to fail. Humana to pull out in 2018. Will repeal, replace & save healthcare for ALL Americans," Trump wrote in a tweet posted Tuesday evening.
Democrats countered that the Trump administration and its Republican allies on Capitol Hill were responsible for the rising instability in insurance markets.
"Congressional Republicans' reckless and irresponsible plan to repeal the Affordable Care Act is already taking health care away from the American people and causing confusion and instability in the insurance market," said Senate Minority Leader Charles E. Schumer, D-N.Y. "Anyone losing access to their insurance has only President Trump and congressional Republicans to blame."
Humana Chief Executive Bruce Broussard in a conference call Tuesday with analysts said the company had made repeated changes to the policies it offered on the marketplaces _ including raising the price of premiums _ to try to make them a sustainable business.
The company, which is recovering from a failed merger with fellow insurance giant Aetna, had found new problems with the recent signups for 2017, he said. That included having too many enrollees who are older and sicker and are expected to have high claims.
"We are again seeing signs of an unbalanced risk pool based on the results of the 2017 open enrollment period," Broussard said. "Therefore we've decided that we can't continue to offer this coverage in 2018."
Humana executives said they expected to lose an estimated $45 million on the policies offered on the exchanges in 11 states this year. In 2015, the company reported overall profit of nearly $1.3 billion.
Company officials said Tuesday that all customers who had signed up for a Humana policy for 2017 would have coverage the entire year.
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