Aetna,Exiting,California,Healt technology Aetna Exiting California Health Insurance Marketplace, Other


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The ramifications of this announcement are very clear and resounding – a major shift is coming for the stalwarts of Affordable Care Act and lots of individuals are going to lose coverage by the end of 2013.Although Aetna will tap the large and small employer market share, the move will spoil its chunk of the individual market and will withdraw coverage from nearly 50,000 Americans in California. Through this action, Aetna, the third largest payer in the country, is going to impact the working of post reform insurance machinery in more ways than one.•This move demonstrates how deep the impact of health insurance marketplaces is and how it is affecting the health insurance terrain across the nation.•Federal authorities are worried about the impact this move might have on the overall viability of the health insurance marketplace. An exit from such a big player can reduce competition, thus driving up the premium rates and sabotaging the main intent and purpose of health reform rollout.•The move also insinuates that Aetna is losing its dominance over the US health insurance market and is incapable of handling the potential competition that will arise once the new health insurance machinery is in place.•Another point to note here is that once Aetna exits, it won’t be able to reenter the market for 5 years. Therefore, it is evident that Aetna is making a long term plan by moving out of the individual insurance market permanently and focusing on large and small employers.Unfortunately, this move has spurred other insurance companies to rethink their strategy for competing in the insurance markets. UnitedHealth Group Inc. and Cigna Corp. have decided to follow Aetna and back out of the state run health exchange. In this foray, 13 other insurance carriers have been selected by the authorities to sell coverage on the state health marketplace. The mandate to comply with lower premiums and uniform deductibles has prompted these carriers to rely on hospitals and physicians for providing better rates and prices. While this is helping them stay profitable, insurance carriers are losing out on providing affordable care to Californians. This lack of big players in the domain will prevent the surge in competition, thus leading to higher premiums and costs for consumers, which in turn will hurt the core premise of Affordable Care Act. The challenge here lies in the withdrawal of top insurance carriers in the wake of extreme competition, heavy regulations and lower margins. If this trend continues, we might notice a drop in quality care from top players in different states around the nation. Naturally, this does not bode well for the future of healthcare in the country. If steps are not taken to stub this trend immediately, America can only hope for a successful implementation of Obamacare and a thriving health insurance marketplace all around.

Aetna,Exiting,California,Healt

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