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Aetna is one of America’s largest health insurance providers. This week, the insurer of nearly a million people announced it is withdrawing 70% of Aetna plans offered on Obamacare exchanges. The exchanges, which offer subsidized premiums for low-income Americans, have helped millions gain access to healthcare. Aetna’s announcement, however, adds to speculation that the controversial program is unsustainable. Aetna is the third major provider of late to scale back its involvement with Obamacare, while still others are reporting serious financial losses. 
Mark Bertolini, CEO of Aetna, has expressed regret over his company’s decision to withdraw from exchanges in 11 of the 15 states where it had been active. Bertolini says that Aetna has suffered $430 million in losses since 2014. The company concludes that, because of Obamacare, it has taken on far more high-risk customers. These low-income individuals are less healthy and therefore likelier to require care, meaning Aetna is spending more to cover claims. Many had hoped the pool of Obamacare customers would become healthier over time, as those most in need of treatment would theoretically sign up earlier than those living comfortably without healthcare. Bertolini suggests this hasn’t been the case, noting that clients purchasing insurance through the Obamacare exchanges increasingly have been those in need of high-cost care.
Senator Elizabeth Warren (D – Mass.) has suggested that Aetna’s decision has more to do with corporate greed than the failings of Obamacare. The senator accuses the company of acting in retaliation against the Obama administration, after the Justice Department filed an anti-trust lawsuit, quashing an attempted merger between Aetna and Humana, another insurance giant that has recently scaled back its presence on Obamacare exchanges. Warren points out that Aetna’s earnings in the most recent quarter beat expectations and, this spring, the company’s leadership had characterized its Obamacare plans as “a good investment.” Now, Warren believes Aetna is using the health of thousands of Americans as “bargaining chips” to change the administration’s mind about allowing the merger.
Senator Ted Cruz (R – Tex.) believes the withdrawals by Aetna and other insurance giants are signs that Obamacare is in a “death spiral.” Cruz, like the vast majority of conservatives, argues that Obamacare has been devastating for insurers and customers alike. Insurance companies, pushed to take on riskier customers, have taken losses that only the largest can absorb. With fewer insurers on the marketplace, competition has become weaker, resulting in less pressure to keep down premiums. As a result, those not receiving subsidies have had to pay more. Meanwhile, small businesses, many of them required under Obamacare laws to provide employee health benefits, have taken on huge cost burdens, causing many to slash jobs and in some cases close down.
Further Reading: NPR / Business Wire / Senator Cruz
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