Read the full transcript below.
ALISON STEWART, PBS NEWSHOUR WEEKEND ANCHOR: Since the Affordable Healthcare Act, often called Obamacare, took effect three years ago, more than 20 million more Americans have obtained health coverage — a majority of them through federal and state exchanges with insurance companies. But this week one of the nation’s largest private insurers, Aetna, decided to drop out next year in 11 of the 15 states where it offers plans. United Health Group and Humana have made similar market exits.
In this map published today, “The New York Times” shows in 2017, 17 percent of Americans eligible for Obamacare will have only one plan from which to choose — the purple areas offer one plan, and the pink ones, two.
“Bloomberg News” healthcare reporter Zach Tracer joins me here in the studio to discuss the pullout and its impact.
OK, Aetna said this was a business decision, straight forward. Was it?
ZACH TRACER, BLOOMBERG NEWS: You know, Aetna has said, “Look, we’re losing a lot of money on the Affordable Care Act, and this is not a market we can afford to be in.”
Now, the big question everybody wants to know is, was this related to the Justice Department’s move to block Aetna’s takeover of Humana. So, about a month ago, the Justice Department sued to stop Aetna from buying another health insurer called Humana. And there is some indication that this may not have just been about financial losses.
STEWART: Yes, the CEO wrote a pretty direct letter, saying we need to do this or we might not show up for 2017.
TRACER: That’s right. So, in early July, before the lawsuit, Aetna’s CEO wrote a letter to the Justice Department in response to some questions from DOJ, about how them potentially blocking the deal would affect his plans. And he said, “Look, if you sue to block this deal, we are going to pull out.”
Aetna says, “That’s true, but the reason we’ll pulling out is that our financial results are worsening. This isn’t retaliation.”
But, clearly, you know, this is a big pullback that came after that lawsuit.
STEWART: Let me ask you a question about language. Aetna’s CEO said it’s losing money. Are they losing money or just not making the same amount of money?
TRACER: Aetna is losing something like $300 million this year on the Affordable Care Act exchanges.
Now, they’re making lots of money in other businesses, and until now they’ve been willing to say the wait-and-see how this particular business worked out. You know, there are not that many places in the U.S. where as a health insurer you can pick up business. Most folks already have health insurance. So, the Affordable Care Act was a new market opportunity for these guys.
STEWART: That was one of the talking points about it — yes, you get new insurers, new people to insure. It didn’t happen?
TRACER: Well, they did. They get about — Aetna has got something like 800,000 new customers. So, some nice growth. The problem is, right now, they’re not making money on it.
STEWART: Can you explain to me why Aetna said it’s losing so much money on Obamacare.
TRACER: So, the key thing that Aetna has said is that they just ended up with sicker, older customers than they expected. There are some other things going on, maybe around the edges. So, they’ve complained about people gaming the exchanges, people signing up for coverage for a few months, they’d be getting a costly surgery or procedure and then dropping out.
But the main thing appears people were sicker than Aetna expected. You know, young, healthy people have stayed away from the exchanges, maybe more than anyone thought that they would. You know, these are not inexpensive policies, though, of course, there are subsidies to help people afford them.
But, you know, if you’re a young, healthy person, you know, it’s a lot of money and you may just say, “You know, I’m going to take my chances,” even though there are these financial penalties for not buying insurance.
STEWART: At least one critic I read of this move said these companies like Aetna and UnitedHealth just are doing business a different way. There are companies that have done business with exchanges which are doing just fine, that they have not adjusted to the marketplace.
TRACER: That’s right. There are companies that are doing well that say they’re making money on the exchanges. So, there’s clearly some strategies, some things insurers are doing that are working. But so far, like you mentioned, United, Humana, Aetna, the real big national insurers just don’t appear to have hit on these winning strategies.
STEWART: So, I’m someone who was in this exchange with Aetna. What do I do in 2017?
TRACER: Well, you know, it’s going to be a problem for folks. They’re going to lose their Aetna coverage as of January 1, 2017. So that means that people have that Aetna policies through the exchange in one of the 11 states that they’re pulling out of, those people are going to need to go and shop and found a new health plan.
STEWART: Zach Tracer from “Bloomberg News” — thanks a lot.
TRACER: Thank you.