- Humana will halt sales of individual health insurance plans through the Affordable Care Act’s exchanges by 2018, which will leave more than 150,000 Humana customers without a carrier.
Amid ongoing political uncertainty, Humana said the shaky future of the ACA is a significant factor in its decision.
“Potential legislative changes, including activities to repeal or replace, in whole or in part, the Health Care Reform Law, creates uncertainty for Humana’s business, and when, or in what form, such legislative changes may occur cannot be predicted with certainty,” the company said in a press release.
Humana expected to lose up to $45 million in ACA health insurance exchanges and expected the federal insurance exchange market to worsen profits.
“We are again seeing signs of an unbalanced risk pool based on the results of the 2017 open enrollment period,” CEO Bruce Broussard said in an investor call. “Therefore we’ve decided we can’t continue to offer this coverage in 2018.”
Humana said it will continue to provide services to its current ACA customers until January 1, 2018.
The decision follows quickly on the heels of a judicial decision to block Humana’s merger with Aetna, a $37 billion proposition. Following the decision, Humana immediately scheduled a conference call for investors about their updated fiscal strategy.
Payers have the potential to succeed in ACA health insurance exchanges, but have felt uneasy due to their inability to set market prices and drive revenues. Some payers believe that larger mergers provided a way to gain competitiveness and improve the quality of care, but have faced substantial fallout following two high-profile merger terminations.
Whether or not Humana’s move will inspire other payers to flee the exchanges remains to be seen. As lawmakers deliberate over the future of the ACA, payers will no doubt be asking for more concrete news from Washington which will allow them to make decisions about their participation.
“As an independent company, we will continue to innovate and sharpen our focus on the local healthcare experience of all our members, especially seniors living with chronic conditions,” Broussard said. “Our strategy not only improves the value we bring to members, doctors and other healthcare professionals, but it also helps reduce costs and enhances the growth platform for both our health plans and our Healthcare Services businesses, thus positioning us well for long-term, sustainable growth.”
“We are very proud of the tremendous effort and commitment of our associates during this extended period of uncertainty and their continuing focus and dedication to helping our members achieve their best health.”