The nation's third largest insurer, Aetna, announced on Thursday that it would not be participating in New York's individual insurance market, which is set to begin selling policies on Oct. 1.
The move comes after Aetna also pulled out of a handful of other insurance exchanges, including Connecticut, earlier this month. Aetna is based in Connecticut.
At the time of the Connecticut pullout, Joseph Rago at the Wall Street Journal reported that the conflict came to a head over state regulators trying to hold premiums down, while the insurance company argued it could not make a profit at those levels.
"Aetna calculated that the premiums the company could charge were unlikely to cover the cost of its claims," Rago wrote, "that is, the company really believed its guesses were right. 'We have spent considerable time identifying those states in which we can be competitive and add the most value to the market,' wrote senior Aetna actuary Bruce Campbell in a letter Friday. 'As a result of our analysis, we have reluctantly concluded that we will withdraw our Individual Exchange filings in Connecticut for 2014.’ ”
"We believe it is critical that our plans not only be competitive, but also financially viable, in order to meet the long-term needs of the exchanges in which we choose to participate. On New York, as a result of our analysis, we reluctantly came to the conclusion to withdraw," Aetna spokeswoman Cynthia Michener told Reuters.
Despite the efforts of state regulators to hold premiums down, the notion that the Affordable Care Act would be, well, affordable, was challenged by National Journal this week.
"For the vast majority of Americans," National Journal reported, "premium prices will be higher in the individual exchange than what they're currently paying for employer-sponsored benefits, according to a National Journal analysis of new coverage and cost data. Adding even more out-of-pocket expenses to consumers' monthly insurance bills is a swell in deductibles under the Affordable Care Act."
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