Healthcare insurer Aetna announced Monday that it would reduce its participation in Obamacare by more than two-thirds, after suffering a $200 million loss in the second quarter of this year, a loss caused by too many sick people signing up for President Obama's signature healthcare program.
"Providing affordable, high-quality health care options to consumers is not possible without a balanced risk pool," the company said in a statement. "Fifty-five percent of our individual on-exchange membership is new in 2016, and in the second quarter we saw individuals in need of high-cost care represent an even larger share of our on-exchange population."
"This population dynamic, coupled with the current inadequate risk adjustment mechanism, results in substantial upward pressure on premiums and creates significant sustainability concerns," it said.
Aetna said it now operates in 778 counties across the country, but that this would be slashed to just 242 counties in 2017. After leaving the other markets, it will operate in just Delaware, Iowa, Nebraska and Virginia.
"As a strong supporter of public exchanges as a means to meet the needs of the uninsured, we regret having to make this decision," it said.
Kevin Counihan, CEO of the Obamacare marketplace, sought to downplay the company's announcement.
"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," he said. "It's no surprise that companies are adapting at different rates to a market where they compete for business on cost and quality rather than by denying coverage to people with preexisting conditions."
He also disputed Aetna's conclusion that the risk pool is simply too costly for companies to bear.
"With high consumer satisfaction, more people getting care, and an improving risk pool, incoming data continue to show that the future of the marketplace is strong," he said.
Aetna's decision follows other high-profile decisions by insurers to leave the Obamacare markets in the face of soaring costs, a pattern that has created skepticism about the long-term health of Obamacare.
In July, Humana said it would leave the Obamacare exchanges in four states, after saying it's losing money on the individual market. The insurer said it would offer plans in just 156 counties in 11 states next year, down from the 1,351 counties it was in this year.
UnitedHealth has also said it would leave most of the individual markets this year, after suffering losses.