Aetna and the company it recently acquired, Coventry, have dropped out of the Georgia health insurance exchange.
The two companies’ departure Wednesday means there are just five insurers left to offer coverage in the Georgia exchange, also known as a marketplace, which starts enrollment Oct. 1. They are Blue Cross and Blue Shield of Georgia, Kaiser Foundation Health Plan, Humana, Alliant, and Peach State.
State Insurance Commissioner Ralph Hudgens announced Wednesday that Aetna and Coventry had suddenly opted not to participate after initially proposing rates for the exchange earlier this year.
Hudgens said in a statement, “Obamacare has created great uncertainty in the health insurance market, and I am not surprised that Aetna and Coventry have decided not to participate in the federally facilitated Georgia Exchange.’’
His announcement came on the day that had been set as a deadline for state regulators to approve the insurance rates for the exchanges, which are being enacted under the health reform law.
But on Tuesday, Hudgens revealed that he had asked federal officials for an “emergency delay’’ so Georgia can study the premium proposals further. He cited “massive rate increases’’ proposed by insurers in the explanation for his request.
Late Wednesday afternoon, state insurance officials said they had not heard from the U.S. Department of Health and Human Services about whether the state would be granted the extension. No other state has sought one.
A federal official indicated Wednesday that the Georgia rates are under review.
An Aetna spokesman, Walt Cherniak, told GHN that the two companies’ pullback from the exchange process “is not a step we take lightly.’’
Cherniak said Connecticut-based Aetna has continued to assess its business strategy in the wake of the Coventry acquisition, completed in late May. He said that deal has had a “significant impact’’ on the company’s priorities.
“We believe it is critical that our plans not only be competitive, but also financially viable, allowing Aetna and Coventry to meet the long-term needs of the exchanges in which we choose to participate,’’ he said.
Cherniak said he could not comment on whether Aetna and Coventry were dropping out of other state exchanges. The reform law calls for exchanges in every state. Some states will run their own, but Georgia and many other states are letting the federal government do it.
Aetna and Coventry will still be providing individual insurance plans in Georgia’s off-exchange market, Cherniak said. Currently, the companies have about 67,000 individual members in the state.
Graham Thompson of the Georgia Association of Health Plans said Wednesday that Aetna and Coventry decision will result in some areas of Georgia having just one health insurer offering coverage in the marketplace.
“The exchange is a very new delivery method that will serve a new, unknown population,‘’ Thompson said.
Aetna and Coventry could jump back into the exchange in 2015, he noted.
Dow Jones reported Tuesday that Aetna appears poised to join exchanges in fewer than 14 states next year. Chief Financial Officer Shawn Guertin said in an interview that the number of states where Aetna would participate may decrease.
“I will tell you we remain very cautious if not more cautious” about these markets, Aetna Chief Executive Mark Bertolini told analysts on an earnings call.