Wednesday, February 15, 2017
Associated Press
It was a rough day for the already-roiled U.S. health insurance market: One giant merger was abandoned, another is threatened by infighting, and a major insurer announced it will stop selling coverage on public exchanges in 11 states.
Both merger deals had already been rejected by federal regulators and judges, but the companies were considering appeals to those decisions. Now they both appear to be off.
Aetna said it was abandoning its planned $34 billion purchase of Medicare Advantage provider Humana early Tuesday. Then, later in the day, Cigna said it is suing Anthem to kill a $48 billion acquisition bid.
The deals were conceived as a way to help the insurers increase their enrollment and cut down on expenses in part so they could improve their performances on the Affordable Care Act’s public insurance exchanges. Big insurers have been hit with substantial losses from the exchanges, even though they represent a relatively small part of their overall business. Many have already cut back their offerings, and that has slashed customer choices in markets around the country.
The collapse of one deal and the uncertain future of the other could hurt shoppers on the exchanges next year by leaving them with even fewer options and potentially higher prices. Humana told investors late Tuesday that it was abandoning it exchanges in all 11 of its states as of the beginning of next year.
Humana, based in Louisville, Ky., was the only insurer on exchanges in 16 Tennessee counties, according to data compiled at the start of the 2017 open enrollment period by the Associated Press and health care consulting firm Avalere. That means customers in those counties may have no way to buy coverage with help from government tax credits next year unless another insurer decides to enter those markets.
Every exchange in the U.S. had at least one insurer selling coverage on it for 2017, according to Larry Levitt of the nonprofit Kaiser Family Foundation, which studies health care issues.