[2/15/17] In yet another sign of trouble for ObamaCare, Humana Inc., one of the nation’s largest health insurers, announced Tuesday that it will be exiting the individual-insurance market, including the ObamaCare exchanges, in 2018.
“Based on our initial analysis of data associated with the company’s healthcare exchange membership following the 2017 open enrollment period, we continue to see further signs of an unbalanced risk pool,” Humana CEO Bruce Broussard said on a conference call with analysts Tuesday. “Therefore, the company has decided that it cannot continue to offer this coverage for 2018.”
Humana, based in Louisville, Kentucky, had already pulled out of most states’ exchanges because of mounting financial losses. Last August it announced that it would reduce its footprint from 1,351 counties in 19 states to just 156 counties in 11 states this year. Now it says even that small amount of coverage is too costly to maintain.
Humana expects to lose $45 million on individual plans covering about 152,000 people this year. “But,” reported CNBC, “it cautioned that this is an early estimate and ‘a number … that we’re going to have to evaluate.’”
In addition to an “unbalanced risk pool” — that is, too many sick people applying for coverage — the company said it was “already seeing higher-than-exepected [sic] pharmacy use and admissions among enrollees” for 2018, according to CNN. All of this is a direct result of ObamaCare’s mandate that insurers accept all comers and charge them roughly the same rates regardless of their health.
Another factor in Humana’s decision appears to be the federal government’s refusal to permit it to merge with Aetna, another health-insurance company. Humana announced its 2017 exchange cutbacks the very day the Justice Department sued to prevent the merger. The government prevailed in court in January, and the two companies announced they would no longer seek to merge just hours before Humana said it was pulling out of the individual market altogether. The same day, health-insurer Cigna filed a lawsuit against Aetna for $13 billion in damages after the feds also blocked a merger of those two companies.
President Donald Trump jumped on the news of Humana’s departure from the individual market, tweeting, “Obamacare continues to fail…. Will repeal, replace & save healthcare for ALL Americans.”
Unfortunately, the slow progress toward achieving Trump’s objective may be another cause for Humana’s decision. “Insurers are complaining loudly about the uncertainty surrounding what will happen in the coming years, even though many states’ exchanges have showed some signs of stability,” wrote the New York Times. “Several major insurers have said they cannot begin to decide whether to offer coverage next year until the government clarifies if and how it plans to change the rules.”