D.C. residents to lose some insurance options next year on health exchange

D.C. residents to lose some insurance options next year on health exchange

By Aaron C. Davis, Washington Post, July 10

District residents who want to purchase individual insurance plans on the city’s health exchange will have fewer options next year.

In fact, individuals searching for more flexibility than that offered by health maintenance organizations will have just one carrier to choose from — and the cost for some of its plans may jump by double digits.

Aetna Life Insurance has begun sending hundreds of city residents letters warning that plans purchased through the city’s health exchange, known as D.C. Health Link, will terminate at the end of the year.

The company is the smaller of two that now offer plans known as Preferred Provider Organizations, or PPOs, which give D.C. residents some freedom to choose their doctors and hospitals.

The changes highlight the city’s struggle to operate one of the smallest independent health exchanges begun under President Obama’s Affordable Care Act. It has also raised uncertainty among the District’s many self-employed, under-employed or retired workers, who need to purchase their own insurance, as to whether they will be able to afford comparable coverage next year.

In the letters, Aetna says it “determined we can no longer meet the needs of our customers while remaining competitive in the market.”

The company’s decision will leave the region’s dominant insurance carrier, CareFirst, as the only one offering PPO plans. CareFirst has proposed rate increases for those plans ranging from less than 3 percent to more than 17 percent. Industry analysts characterized those increases as moderate, given an average increase of about 7 percent expected nationwide.

Overall, the number of health plans offered next year on the D.C. exchange will shrink to 162, or about half the number offered when the exchange began two years ago.

Mila Kofman, director of the exchange, said the changes do not signal any trouble with the health of the city’s marketplace. She said the smaller number of plans shows that carriers have become better at figuring out what residents want.

Aetna’s departure would not adversely affect residents, Kofman said, and exchange officials will personally reach out to affected D.C. residents to help them find another provider.

Kofman said that Aetna had failed to gain much market share in the city. “When you have products when there’s not a whole lot of interest to buy, that’s the market telling the carrier what they are selling, people can’t afford. So in terms of competition, it’s not a loss,” she said. “I don’t consider that real competition.”

Aetna will continue to offer plans on the exchange through employers, including Congress. Federal lawmakers and their staff employees make up more than 16,100 of the nearly 19,800 people who buy insurance on the exchange through employers in the District. A slightly larger group — more than 23,000 people — have been insured through individual plans purchased on the marketplace.

Robert Laszewski, a health-care consultant in Virginia, said Aetna’s departure reflects the fact that the District’s small market remains a problem area for insurers who do not cater to the federal workforce.

“The District has never been thought of as an attractive market. It’s not a state — it’s one city, one moderate-sized city, and it’s also known for extreme regulation,” Laszewski said. “When you have a small market that gives a lot of regulatory trouble, for insurers, it’s like, why bother?”

Walt Cherniak, an Aetna spokesman, said the company “reluctantly decided” it would scale down in the District. “It’s about whether it was the right thing for us,” he said.

Aaron Davis covers D.C. government and politics for The Post and wants to hear your story about how D.C. works — or how it doesn’t.

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