Aetna Inc., one of the nation’s largest insurance companies, announced it’s withdrawal from Maryland’s new health insurance exchange under Obamacare Friday due to insurance policy rate cuts.
Maryland, much like California, is enthusiastically making early plans to implement Obamacare, which is set to begin October 1. Under Obamacare, or the Affordable Care Act, Americans will be able to purchase state insurance plans online.
According to Reuters,
“The government is counting on about 7 million people to enroll next year for this insurance, many of whom will qualify for subsidies.”
Aetna was one of several carriers set to sell the state’s plan under Obamacare, but after the state announced the low rate at which providers would be required to sell, Aetna pulled out. In a letter to Maryland Insurance Commissioner Therese M. Goldsmith, Aetna said that the plan “would not allow us to collect enough premiums to cover the cost of the plans.”
Under the Maryland state plan, Aetna along with Coventry Health Care, which it acquired this spring, would be required to cut its insurance premiums by 29%. Aetna’s monthly premium would drop to $281 per month from its previously requested $394 a month.
Aetna said in a statement:
“This is not a step that we take lightly. We believe it is critical that our plans not only be competitive, but also financially viable, allowing Aetna and Coventry to meet the long-term needs of the Exchanges in which we choose to participate.”
Aetna is taking a cautious approach to Obamacare which will require benefits to be sold to all Americans regardless of their health. Earlier this year, Aetna withdrew from both California and Georgia’s state-based insurance exchanges.