More exchange exits: Humana out of Virgina, Alabama; Blue Cross hints at leaving NC

Following the departures of other major insurers from the Affordable Care Act’s health insurance marketplaces, Humana has informed insurance officials in Alabama and Virginia it won’t be offering individual coverage on or off the exchanges.

The letters from Humana Product Compliance Process Owner Jane Rouse date back to April 15, prior to UnitedHealth announcing its departure from all but a “handful” of state exchanges and before Humana released its first quarter earnings report that partially blamed a 46 percent drop in profits on losses in its exchange business.

The earliest exit letter was sent to the Virginia Bureau of Insurance.

“The discontinuance does not impact and does not include any employer‐sponsored group health insurance plans. The decision to exit the individual major medical market in Virginia was made only after much careful thought and analysis,” Rouse wrote on April 15.

A similar letter was written to Alabama’s insurance division on April 22. Rouse also informed state insurance commissioners in Wisconsin on May 3 and Kansas on May 5 that Humana wouldn’t be offering individual plans off their exchanges for 2017.

Combined, these exits from states will effect more than 25,000 people in the 4 states, 15,000 of them in Alabama. Only one insurer, Blue Cross Blue Shield of Alabama, will be offering plans on the state’s exchange next year.

In its financial report—released after three of these four letters had been sent out—Humana didn’t name any of the states where it plans to depart.

“Humana is in the process of finalizing plans for its ACA-compliant individual commercial medical market offerings in 2017,” the report said. “Humana anticipates proposing a number of changes to retain a viable product for individual consumers, where feasible, and address persistent risk selection challenges. Such changes may include certain statewide market and product exits both on and off exchange, service area reductions and pricing commensurate with anticipated levels of risk by state.”

Other companies are following UnitedHealth and Humana out of the exchange business, or hinting they might. Blue Cross Blue Shield of North Carolina is one of several insurers saying the cost of offering plans in “unsustainable.”

“We can’t continue to offer all that we’re offering if the net result is a $282 million loss year over year over year,” BCBS of NC CEO Brad Wilson said to CBS North Carolina.

Some insurers are moving in the opposite direction. Forbes reports Anthem and Centene are planning on expanding their offerings on the insurance marketplaces for 2017.