Insurer Aetna lays out concerns about ACA exchange business

Aetna has joined other major health insurers in sounding a warning about the Affordable Care Act's public insurance exchanges.

The nation's third-largest insurer said Monday it has been struggling with customers who sign up for coverage outside the ACA's annual enrollment window, then use a lot of care. This dumps claims on the insurer without providing enough premium revenue to counter the costs.

The ACA provides an annual enrollment window that gives people several weeks each fall during which they can buy coverage for the next year. The law established that window to prevent people from waiting until they become sick to buy insurance. But insurers say it has become too easy for customers to sign up outside of this window.

Customers are allowed to buy coverage outside that time frame if they lose a job, get divorced or have a child, among other reasons. Insurers want the federal government, which processes coverage applications in 38 states, to take a closer look at whether people actually qualify for these special enrollment periods when they apply for coverage.

Aetna and UnitedHealth Group Inc. said the exchange customers they get outside the annual enrollment window use more health care than those who sign up within it. This includes some cases in which it appears a customer bought coverage, used it, then dropped it.

"Insurance systems tend to get stressed when people can buy coverage when they know they need it and then drop it when they know they don't," chief financial officer Shawn Guertin said.

The Centers for Medicare and Medicaid Services recently outlined several changes it said it was making to help shore up exchange enrollment windows.

Aetna is a big player in the ACA's state-based exchanges. It has enrolled about 750,000 people and is selling coverage in 15 states this year. It lost more than $100 million last year on its exchange business, which makes up a small part of its overall enrollment.

"We continue to have serious concerns about the sustainability of the public exchanges," Aetna chairman and CEO Mark Bertolini said Monday.

Blue Cross-Blue Shield insurer Anthem Inc. also is paying attention to how the government deals with special enrollment periods as it judges how sustainable the exchange business will be in the future, CEO Joseph Swedish said recently.

UnitedHealth Group has said it will decide this year whether to participate in the public exchanges in 2017.

Aetna leaders, who have supported the exchanges in the past, said they still are committed and not ready yet to make that kind of call.

"It would be premature frankly to declare victory or defeat at this stage in the process," Guertin said.

Federal officials announced last month they would end several narrow special enrollment windows that focused on consumers such as non-citizens with incomes below the federal poverty level who experienced processing delays.

Customers still will be able to use special enrollment periods to shop for coverage if they lose their insurance for more common reasons such as a move, a marriage or divorce or the loss of a job.

But the government plans to clarify guidelines on those remaining windows so customers understand them better. That includes clarifying an enrollment period cannot be used for a temporary move, and people who do not provide accurate information on their application could be penalized.

HealthCare.gov CEO Kevin Counihan said in a Jan. 19 blog post special enrollment periods will not be available for "the vast majority of consumers." HealthCare.gov operates public insurance exchanges in 38 states.

"For example, special enrollment periods are not allowed for people who choose to remain uninsured and then decide they need health insurance when they get sick," he wrote.

Insurers are also making adjustments. Aetna has left exchanges in markets like Kansas where it incurred high costs. It also has raised rates and done other things to shore up a business that only contributes about 5 percent of its total enrollment.

Guertin said the company hopes its exchange business will move closer to breaking even next year.