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As Insurers Like Aetna Balk, U.S. Makes New Push to Bolster Health Care Act - The New York Times

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id="story" class="story theme-main "> <div id="TragedyAd" class="ad tragedy-ad nocontent robots-nocontent"></div> <header id="story-header" class="story-header"> <div id="story-meta" class="story-meta "> <div class="supported-by hidden nocontent robots-nocontent"> <span class="ad-label">Supported by</span> <div id="supported-by-ad" class="supported-by-ad ad"></div> </div> <h3 class="kicker"> <span class="kicker-label"><a href="https://web.archive.org/web/20160818194729/http://www.nytimes.com/pages/politics/index.html">Politics</a></span> </h3> <h1 itemprop="headline" id="headline" class="headline">As Insurers Like Aetna Balk, U.S. Makes New Push to Bolster Health Care Act</h1> <div id="story-meta-footer" class="story-meta-footer"> <p class="byline-dateline"><span class="byline" itemprop="author creator" itemscope itemtype="http://schema.org/Person" itemid="http://topics.nytimes.com/top/reference/timestopics/people/p/robert_pear/index.html">By <a href="https://web.archive.org/web/20160818194729/http://topics.nytimes.com/top/reference/timestopics/people/p/robert_pear/index.html" title="More Articles by ROBERT PEAR"><span class="byline-author" data-byline-name="ROBERT PEAR" itemprop="name">ROBERT PEAR</span></a> and </span><span class="byline" itemprop="author creator" itemscope itemtype="http://schema.org/Person" itemid="http://www.nytimes.com/by/reed-abelson"><a href="https://web.archive.org/web/20160818194729/http://www.nytimes.com/by/reed-abelson" title="More Articles by REED ABELSON"><span class="byline-author" data-byline-name="REED ABELSON" itemprop="name">REED ABELSON</span></a></span><time class="dateline" datetime="2016-08-18T13:57:49-04:00" itemprop="dateModified" content="2016-08-18T13:57:49-04:00">AUG. 17, 2016</time> </p> <div class="story-meta-footer-sharetools"> <div id="sharetools-story-meta-footer" aria-label="tools" role="group" class="sharetools theme-classic sharetools-story-meta-footer " data-shares="facebook,twitter,email,show-all,save" data-url="https://web.archive.org/web/20160818194729oe_/http://www.nytimes.com/2016/08/18/us/politics/as-insurers-balk-us-makes-new-push-to-boost-health-care-act.html" data-title="As Insurers Like Aetna Balk, U.S. Makes New Push to Bolster Health Care Act" data-author="By ROBERT PEAR and REED ABELSON" data-media="https://static01.nyt.com/images/2016/08/18/us/18health/18health-jumbo.jpg" data-description="An uneasy truce between the government and insurers appears to be fraying as some of the large companies say they are leaving or sharply scaling back." data-publish-date="August 17, 2016"> <a class="visually-hidden skip-to-text-link" href="#story-continues-1">Continue reading the main story</a> <span class="sharetools-label visually-hidden">Share This Page</span> <div class="ad sharetools-inline-article-ad hidden nocontent robots-nocontent"> <a class="visually-hidden skip-to-text-link" href="#story-continues-1">Continue reading the main story</a> </div> </div><!-- close shareTools --> <button class="button comments-button theme-speech-bubble" data-skip-to-para-id=""> </button> </div> </div><!-- close story-meta-footer --> </div><!-- close story-meta --> </header> <div class="story-body-supplemental"> <div class="story-body story-body-1"> <figure id="media-100000004598375" class="media photo lede layout-large-horizontal" data-media-action="modal" itemprop="associatedMedia" itemscope itemid="https://static01.nyt.com/images/2016/08/18/us/18health/18health-master768.jpg" itemtype="http://schema.org/ImageObject" aria-label="media" role="group"> <span class="visually-hidden">Photo</span> <div class="image"> <img src="https://web.archive.org/web/20160818194729im_/https://static01.nyt.com/images/2016/08/18/us/18health/18health-master768.jpg" alt="" class="media-viewer-candidate" data-mediaviewer-src="https://web.archive.org/web/20160818194729/https://static01.nyt.com/images/2016/08/18/us/18health/18health-superJumbo.jpg" data-mediaviewer-caption="Aetna announced on Monday that it would sharply reduce its participation for the Affordable Care Act in the public marketplaces next year." data-mediaviewer-credit="Jessica Hill/Associated Press" itemprop="url" itemid="https://static01.nyt.com/images/2016/08/18/us/18health/18health-master768.jpg"/> <meta itemprop="height" content="508"/> <meta itemprop="width" content="768"/> </div> <figcaption class="caption" itemprop="caption description"> <span class="caption-text">Aetna announced on Monday that it would sharply reduce its participation for the Affordable Care Act in the public marketplaces next year.</span> <span class="credit" itemprop="copyrightHolder"> <span class="visually-hidden">Credit</span> Jessica Hill/Associated Press </span> </figcaption> </figure> <p class="story-body-text story-content" data-para-count="234" data-total-count="234">WASHINGTON — Facing high-profile withdrawals from online insurance exchanges and surging premiums, the Obama administration is preparing a major push to enroll new participants into public marketplaces under the Affordable Care Act.</p><p class="story-body-text story-content" data-para-count="201" data-total-count="435">The administration is eyeing an advertising campaign featuring testimonials from newly insured consumers, as well as direct appeals to young people hit by tax penalties this year for failing to enroll.</p><p class="story-body-text story-content" data-para-count="295" data-total-count="730">But as many insurers continue to lose money on the exchanges, they say the administration’s response is too late and too weak. The companies point to a fundamental dynamic in the marketplace in which too few healthy people are buying policies and too many sick people are filing costly claims.</p><p class="story-body-text story-content" data-para-count="396" data-total-count="1126">And the uneasy truce between the government and insurers, which followed adoption of the <a href="https://web.archive.org/web/20160818194729/http://topics.nytimes.com/top/news/health/diseasesconditionsandhealthtopics/health_insurance_and_managed_care/health_care_reform/index.html?inline=nyt-classifier" title="Recent and archival news about healthcare reform." class="meta-classifier">health care law</a>, appears to be fraying as some of the large companies say they are leaving or sharply scaling back. Aetna warned the Justice Department last month that the company would curtail its participation in the exchanges if the government sued to block its acquisition of Humana, a major competitor.</p> <a class="visually-hidden skip-to-text-link" href="#story-continues-1">Continue reading the main story</a> </div><!-- close story-body --> <div class="supplemental first" id="supplemental-1"> </div><!-- close supplemental --> </div><!-- close story-body-supplemental --> <div class="story-interrupter" id="story-continues-1"> </div> <div class="story-body-supplemental"> <div class="story-body story-body-2"> <p class="story-body-text story-content" data-para-count="333" data-total-count="1459" id="story-continues-2"><a href="https://web.archive.org/web/20160818194729/http://www.huffingtonpost.com/entry/aetna-obamacare-pullout-humana-merger_us_57b3d747e4b04ff883996a13">In a July 5 letter, disclosed by The Huffington Post</a>, Mark T. Bertolini, the chairman and chief executive of Aetna, said that in the event of a lawsuit, “we will immediately take action to reduce our 2017 exchange footprint.” He argued that Aetna needed to form a combined insurance giant to mitigate its losses on the exchanges.</p><div id="story-ad-1" class="story-ad ad ad-placeholder nocontent robots-nocontent"> <div class="accessibility-ad-header visually-hidden"> <p>Advertisement</p> </div> <a class="visually-hidden skip-to-text-link" href="#story-continues-3">Continue reading the main story</a> </div> <p class="story-body-text story-content" data-para-count="377" data-total-count="1836" id="story-continues-3">The Justice Department filed suit two weeks later, saying that the combination of Aetna and Humana would reduce competition in violation of federal antitrust law. On Monday, Aetna announced that it would sharply reduce its participation in the public marketplaces next year, offering individual insurance products in 242 of the 778 counties where it now provides such coverage.</p><p class="story-body-text story-content" data-para-count="266" data-total-count="2102">An Aetna spokesman insisted on Wednesday that it was the growing financial losses in the exchanges — not the challenge to its acquisition of Humana — that ultimately “drove us to announce the narrowing of our public exchange presence for the 2017 plan year.”</p> <a class="visually-hidden skip-to-text-link" href="#story-continues-4">Continue reading the main story</a> </div><!-- close story-body --> <div class="supplemental " id="supplemental-2"> </div><!-- close supplemental --> </div><!-- close story-body-supplemental --> <div class="story-interrupter" id="story-continues-4"> <div id="MegaAd" class="ad mega-ad request-pending nocontent robots-nocontent"> <div class="accessibility-ad-header visually-hidden"> <p>Advertisement</p> </div> <a class="visually-hidden skip-to-text-link" href="#story-continues-5">Continue reading the main story</a> <div class="mega-ad-creative"></div> </div> </div> <div class="story-body-supplemental"> <div class="story-body story-body-3"> <p class="story-body-text story-content" data-para-count="354" data-total-count="2456" id="story-continues-5">Anthem, another big insurer, said that its losses had been increasing, but that it had no plans to leave the marketplaces. In a separate lawsuit, the Justice Department has challenged Anthem’s proposed acquisition of Cigna. Anthem operates for-profit Blue Cross plans in 14 states and says it can expand to other states only if the merger goes through.</p><p class="story-body-text story-content" data-para-count="157" data-total-count="2613">“We’re all in,” said Joseph R. Swedish, the chief executive of Anthem. “We’re committed, but we do need adjustments and not just at the margins.”</p><p class="story-body-text story-content" data-para-count="432" data-total-count="3045">The major insurers, which appeared more optimistic about the marketplaces earlier in the year, “have been seeing losses, and the losses have worsened,” said Ana Gupte, an analyst at Leerink Partners who follows the insurance industry. In the case of Aetna, she said, its ability to withstand those losses was weakened when it became clear it might not be able to rely on the cost savings it expected from its merger with Humana.</p><p class="story-body-text story-content" data-para-count="345" data-total-count="3390">This tumult is happening as the administration prepares for the fourth annual open enrollment period under <a href="https://web.archive.org/web/20160818194729/http://topics.nytimes.com/top/reference/timestopics/people/o/barack_obama/index.html?inline=nyt-per" title="More articles about Barack Obama" class="meta-per">President Obama</a>’s heath law, which is scheduled to start on Nov. 1, a week before Election Day. Most Americans still get their insurance through their employers or government programs such as <a href="https://web.archive.org/web/20160818194729/http://topics.nytimes.com/top/news/health/diseasesconditionsandhealthtopics/medicare/index.html?inline=nyt-classifier" title="Recent and archival health news about Medicare." class="meta-classifier">Medicare</a>, <a href="https://web.archive.org/web/20160818194729/http://topics.nytimes.com/top/news/health/diseasesconditionsandhealthtopics/medicaid/index.html?inline=nyt-classifier" title="Recent and archival health news about Medicaid." class="meta-classifier">Medicaid</a> and veterans health care.</p><p class="story-body-text story-content" data-para-count="366" data-total-count="3756">The insurance exchanges were expected to be a major supplement to that system for people who do not have access to employer plans or government programs. But enrollment in the exchanges — 11 million at the end of March — is far below expectations, and insurers say it must increase to produce a better, more sustainable mix of healthy and less healthy consumers.</p><p class="story-body-text story-content" data-para-count="360" data-total-count="4116">Administration officials said they would try to sign up more young adults, with a special emphasis on those turning 26 and moving off their parents’ plans. Officials said that they would, for the first time, send letters about marketplace coverage to people who had paid the tax penalty for being uninsured, a group in which young adults are overrepresented.</p><div id="story-ad-2" class="story-ad ad ad-placeholder nocontent robots-nocontent"> <div class="accessibility-ad-header visually-hidden"> <p>Advertisement</p> </div> <a class="visually-hidden skip-to-text-link" href="#story-continues-6">Continue reading the main story</a> </div> <p class="story-body-text story-content" data-para-count="362" data-total-count="4478" id="story-continues-6">The administration is also hunting for consumers who can deliver “testimonials” advertising the benefits of coverage under the Affordable Care Act. “Interested consumers could appear in television, radio, print and/or digital ads and on social media,” the administration said in an appeal sent last week to health care advocates and insurance counselors.</p><p class="story-body-text story-content" data-para-count="306" data-total-count="4784">The testimonials could counter negative publicity generated by rising premiums, the withdrawal of major insurers like Aetna, Humana and UnitedHealth from many counties, and the collapse of insurance cooperatives in at least a dozen states. The effort could also raise protests from Republicans in Congress.</p><p class="story-body-text story-content" data-para-count="455" data-total-count="5239">Madison Hardee, a lawyer at Legal Services of Southern Piedmont, in Charlotte, N.C., said that “enrollment stories can be an incredibly powerful tool to connect with consumers.” Such testimonials are urgently needed, she said, because “consumers in North Carolina are already starting to get notices about <a href="https://web.archive.org/web/20160818194729/http://topics.nytimes.com/top/news/health/diseasesconditionsandhealthtopics/health_insurance_and_managed_care/index.html?inline=nyt-classifier" title="Recent and archival health news about health insurance and managed care." class="meta-classifier">health insurance</a> companies leaving the marketplace, and they fear the changes will reduce their ability to get quality, affordable coverage.”</p><p class="story-body-text story-content" data-para-count="242" data-total-count="5481">The administration has minimized the significance of such setbacks, but that response has rattled insurers even more, suggesting to some that federal officials do not appreciate the depth of the financial and other challenges facing insurers.</p><p class="story-body-text story-content" data-para-count="355" data-total-count="5836">In a letter to state insurance commissioners last summer, Kevin J. Counihan, chief executive of the federal insurance marketplace, said that “recent claims data show healthier consumers” and “a decline in pent-up demand for services.” He said again last week, in a blog post, that the marketplace was “gaining healthier, lower-cost consumers.”</p><p class="story-body-text story-content" data-para-count="243" data-total-count="6079">Marilyn B. Tavenner, a former Obama administration official who is now president and chief executive of America’s Health Insurance Plans, a trade group, said the administration’s latest assessment of the market was “overly optimistic.”</p><p class="story-body-text story-content" data-para-count="412" data-total-count="6491">It is not only for-profit companies that are losing money. Health Care Service Corporation, which runs nonprofit Blue Cross and Blue Shield plans in Illinois, Montana, New Mexico, Oklahoma and Texas, said it lost $1.5 billion last year selling individual policies on the exchanges. In some states, insurers have increased their original rate requests for 2017 because, they say, costs surpass recent projections.</p><p class="story-body-text story-content" data-para-count="359" data-total-count="6850">In Tennessee, Cigna last week requested rate increases averaging 46 percent, double the request it made in June, and Humana is seeking an average increase of 44 percent, up from 29 percent in June. The other major carrier in the state, BlueCross BlueShield of Tennessee, said it was standing by its original request for increases averaging 62 percent in 2017.</p><button class="button comments-button theme-speech-bubble-large" data-skip-to-para-id=""> </button> <p class="story-body-text story-content" data-para-count="471" data-total-count="7321">“Obamacare is spiraling out of control,” said Senator Lamar Alexander, Republican of Tennessee and chairman of the Senate health committee. Mr. Counihan, the administration official, said that with high consumer satisfaction and more people getting care, “the future of the marketplace is strong.” Moreover, the administration said, most people buying insurance on the exchanges receive federal subsidies, so they will not feel the full impact of higher premiums.</p><div id="story-ad-3" class="story-ad ad ad-placeholder nocontent robots-nocontent"> <div class="accessibility-ad-header visually-hidden"> <p>Advertisement</p> </div> <a class="visually-hidden skip-to-text-link" href="#story-continues-7">Continue reading the main story</a> </div> <p class="story-body-text story-content" data-para-count="444" data-total-count="7765" id="story-continues-7">Tensions between insurance companies and federal officials over government programs are hardly unusual, said Sabrina Corlette, a professor at the Health Policy Institute of Georgetown University. She said that companies’ business interests may conflict with a program’s policy goals. “The bigger issue is a lot of people just don’t find it affordable,” she said. “Clearly that is something Congress is going to have to deal with.”</p><footer class="story-footer story-content"> <div class="story-meta"> <div class="story-notes"><p>Reed Abelson reported from New York</p></div> <div class="story-info"><p><em>Follow The New York Times’s politics and Washington coverage on <a href="https://web.archive.org/web/20160818194729/https://www.facebook.com/nytpolitics">Facebook</a> and <a href="https://web.archive.org/web/20160818194729/http://twitter.com/nytpolitics">Twitter</a>, and sign up for the <a href="https://web.archive.org/web/20160818194729/http://www.nytimes.com/newsletters/politics/">First Draft politics newsletter</a>.</em></p></div> <p class="story-print-citation">A version of this article appears in print on August 18, 2016, on page A1 of the <span itemprop="printEdition">New York edition</span> with the headline: U.S. Prepares Enrollment Push as Insurers Balk on Health Law. <span class="story-footer-links"> <span><a href="https://web.archive.org/web/20160818194729/http://www.nytreprints.com/" target="_blank">Order Reprints</a><span class="pipe">|</span></span> <span><a href="https://web.archive.org/web/20160818194729/http://www.nytimes.com/pages/todayspaper/index.html" target="_blank">Today's Paper</a><span class="pipe">|</span></span><span><a href="https://web.archive.org/web/20160818194729/http://www.nytimes.com/subscriptions/Multiproduct/lp839RF.html?campaignId=48JQY" target="_blank">Subscribe</a></span> </span> </p> </div><!-- close story-meta --> </footer> <a class="visually-hidden skip-to-text-link" href="#whats-next">Continue reading the main story</a> </div><!-- close story-body --> <div class="supplemental " id="supplemental-3"> </div><!-- close supplemental --> </div><!-- close story-body-supplemental --> <div id="storage-drawer" class="hidden"> 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