Another health insurance company announced this week it will exit the Obamacare marketplace, a move that leaves South Carolina customers who rely on the federal law for coverage with even fewer options next year.
Aetna sells Affordable Care Act plans in 14 South Carolina counties, including Charleston, Berkeley and Dorchester. Company officials announced Monday that Aetna will close this line of business in the state and in nearly 70 percent of counties across the country where it currently sells such coverage because they said Obamacare customers aren’t profitable.
Next year it will offer coverage in only four states.
United Healthcare, which also sells Obamacare plans in some South Carolina counties, made a similar announcement earlier this year.
If nothing else changes, this leaves Affordable Care Act customers here with just two options for coverage next year: Blue Cross Blue Shield of South Carolina or its subsidiary, BlueChoice.
“Companies have given it their best shot and can’t sustain that business model, can’t make a profit,” S.C. Department of Insurance Director Ray Farme said. “It does show that the Affordable Care Act has not worked, does not work and cannot work under this structure.”
But government officials say the exchanges are improving and healthier people are signing up, which helps insurers balance the claims they get from sicker customers.
“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,” Kevin Counihan, chief executive of the federal exchange operator HealthCare.gov, said in an emailed statement.
Farmer, a member of Gov. Nikki Haley’s Cabinet, would not confirm if other companies will sell Obamacare plans in South Carolina in 2017. Insurers were required to submit their proposed rates and plans to his agency for review earlier this year. The approved plans will be made public this fall, he said. Enrollment for 2017 coverage opens on HealthCare.gov in November.
Aetna’s pending departure from the South Carolina market creates a unique problem for customers in the Lowcountry because Blue Cross Blue Shield and BlueChoice do not cover services for Obamacare patients at the Medical University of South Carolina.
Medical University Hospital CEO Pat Cawley told the MUSC Board of Trustees last week the hospital is trying to negotiate a deal with Blue Cross Blue Shield of South Carolina to cover these patients.
Earlier this summer, Cawley predicted the health insurance marketplace would “implode in the next year or two.”
More than 220,000 South Carolinians rely on the federal health care law for insurance. This year, only 8,000 of them are covered by Aetna plans.
“Overall, in terms of all of the people who enrolled, (Aetna and United Healthcare) were really small fish,” said Shelli Quenga, who helps residents enroll in Affordable Care Act plans as the director of programs for the nonprofit Palmetto Project. “Very few people chose those plans because they were more expensive.”
Aetna’s departure isn’t great news, she said, but the fact the company won’t sell Obamacare plans next year doesn’t spell the law’s demise.
“There are other states who have been operating with only one carrier,” she said. “And we have two.”
Meanwhile, many Republicans pounced on Aetna’s announcement as an opportunity to criticize the federal law.
“This is what many of us have warned about, and for that reason voted against, in terms of unforeseen consequence with regard to Obamacare,” said U.S. Rep. Mark Sanford, who was not a member of Congress when the Affordable Care Act was passed in 2010. “This was actuarially baked into the books at the time that bill was signed into law. Its fatal flaw from the very beginning was actuarial sustainability and conceptually. People can love it or hate it, but mathematically, it does not work.”
U.S. Rep. Jeff Duncan, R-S.C., called on Congress to repeal and replace the law.
“Aetna’s decision to reduce its participation in Obamacare exchanges by more than 500 counties ... is no shock,” he said. “The government’s attempt to command and control health care from Washington is yet another rosy campaign promise confronted with the reality of economics.”
U.S. Rep. Jim Clyburn, South Carolina’s only Democrat in Congress, touted how the law covers millions of Americans.
“Despite its partisan detractors it is the law of the land with high consumer satisfaction ratings, and will continue to provide quality coverage for years to come,” he said.
The Associated Press and Post and Courier reporter Emma Dumain contributed to this report. Reach Lauren Sausser at 843-937-5598.