Aetna plans to drop Affordable Care Act health-insurance coverage in Arizona

• Aetna announces it will drop Affordable Care Act plans in Arizona, other states
• Aetna was the only marketplace insurer that planned to sell in Pinal County next year
• Blue Cross Blue Shield of Arizona said it may re-evaluate

With health-insurance giant Aetna dropping Affordable Care Act coverage in Arizona and 10 other states next year, Pinal County residents could be left without a health-insurance marketplace option unless another insurer adds coverage to the fast-growing county.

Aetna planned to expand in Pinal, and was poised to be the county's only marketplace option when coverage for the new year begins Jan. 1. But the insurer announced this week that it would drop ACA plans in Pinal and Maricopa counties as part of a nationwide pullback.

Insurers have filed to offer health-insurance plans in every Arizona county except Pinal, which becomes the only known county in the nation without an insurer lined up for marketplace coverage next year.

RELATED: Insurers dwindle as Humana, UnitedHealthcare exit Arizona

RELATED: Blue Cross, Health Net drop Affordable Care Act marketplace plans

As it stands now, marketplace enrollees in an Aetna plan can keep their existing coverage through the end of this year, but will need to choose a new plan for 2017.

Plans without subsidies

Aetna officials said the insurer will sell an "off-exchange" plan in Maricopa County next year, but such plans don't come with financial subsidies that make them appealing to marketplace-eligible lower- and middle-income customers.

The federal government has not released detailed insurance-plan information yet, making it difficult to accurately gauge whether any other U.S. counties may face a similar challenge. Officials at the U.S. Department of Health and Human Services expect circumstances to change before the November start of the three-month open-enrollment period.

“We are working collaboratively with the Arizona Department of Insurance and remain confident that all Arizona residents will have access to coverage next year,” HHS spokesman Benjamin Wakana said.

Arizona insurer exits roil Affordable Care Act marketplace

Arizona Department of Insurance spokesman Stephen Briggs said the state cannot force an insurer to provide marketplace coverage in a particular county.

"We are going to continue to keep our eye on this, continue to have conversations with other providers and see what, if anything, we can do to get coverage in every county in Arizona," Briggs said.

Pinal County officials expressed worries that thousands of residents could be left without access to health coverage. HHS records show 9,667 Pinal County residents had selected a marketplace plan as of Feb. 1.

"It's a big concern," said Tom Schryer, director of Pinal County's public-health-services district. "If you don't have access to a good network of health providers at an affordable cost, that can have a big impact on how healthy your community is."

But fears of no insurance providers may be short-lived. Officials with Blue Cross Blue Shield of Arizona confirmed they were in contact with insurance regulators following Aetna's exit.

Blue Cross Blue Shield announced earlier this year that it would discontinue marketplace coverage in Maricopa and Pinal counties in 2017. The insurer cited $185 million in financial losses in 2014 and 2015 as factors for the pullback.

But after Aetna's exit, Blue Cross Blue Shield said it would reconsider.

"We are re-evaluating our 2017 plans and where Blue Cross Blue Shield of Arizona makes coverage available," the insurer said in a statement.  "Our leadership team is in the process of speaking with regulators in light of the recent news of Pinal County residents having no options."

"The challenges of the Affordable Care Act make the market highly unpredictable and financial viability uncertain," the insurer added, citing regulatory and contract language changes for ACA insurers. "In spite of this, we will continue to try and find a way to make health insurance available to as many Arizonans as possible."

Exiting and scaling back 

A wave of health insurers have announced plans or filed paperwork to exit Arizona's marketplace altogether or scale back offerings in some counties in 2017.

Blue Cross, Health Net drop Affordable Care Act marketplace plans

Insurers cite financial losses with marketplace plans as a factor. But financial reports show publicly traded insurers have enjoyed robust profits in other parts of their business, including plans offered to employers or government insurance programs such as Medicare and Medicaid.

Aetna joins UnitedHealthcare, Health Choice Insurance Co. and Humana as insurers discontinuing marketplace plans in Arizona. Health Net will only offer plans in Pima County next year, according to state Department of Insurance filings.

The wild card is Blue Cross Blue Shield, an insurer that has sold plans in every county in Arizona since the Affordable Care Act marketplace launched on Jan. 1, 2014. The insurer's filings with state regulators indicate it will drop Maricopa and Pinal counties next year, but the insurer's statement indicates that it will re-evaluate its footprint in the wake of Aetna's exit.

In Maricopa County, the state's most populous county, only Cigna and Phoenix Health Plans Inc. have filed to sell marketplace plans in 2017.

Analysts said the large number of insurance companies dropping coverage in Arizona could put the state in a unique position. It was once considered among the robust insurance exchanges based on the number of insurers competing for business. But consumers will be left with far fewer choices this year.

"The way it (insurer exits) has hit Arizona is particularly noticeable relative to other states," said Cynthia Cox, associate director of the Henry J. Kaiser Family Foundation's program for the study of health reform and private insurance. "It's going from a state that had quite a few insurers to having very few insurers."

Rate increases sought

The insurers that remain also are seeking larger rate increases, according to Department of Insurance filings.

Obamacare insurers dwindle as Humana, UnitedHealthcare exit Arizona

Phoenix Health Plans, one of two insurers remaining in Maricopa County, will seek an average rate hike of 122.8 percent, or double the percentage that it originally requested. Cigna, the other Maricopa County plan, has asked for a average rate increase of 19.2 percent, up from an original request of 8.7 percent.

Health Net is seeking an average rate increase of 48.5 percent, compared with its initial request to raise rates 29.1 percent.

Blue Cross Blue Shield initially sought an average rate increase of 64.9 percent, but the insurer lowered the average rate-request increase to 51.2 percent after it decided to drop Maricopa and Pinal counties. If the insurer again decides to add Pinal, it's unclear whether it will seek a larger rate increase.

The Department of Insurance and the Centers for Medicare and Medicaid Services must review and approve the filings before enrollment begins this fall.

About 69 percent of the 179,445 Arizonans enrolled in a marketplace plan as of March 31 received a tax credit that lowered the monthly cost of their insurance premium. Consumers who earned less than 2.5 times the federal poverty level also are eligible for cost-sharing reductions.

So even if insurers raise monthly premiums, the amount consumers pay may not change substantially after these subsidies are calculated.

Far more Arizonans have gained coverage from Arizona's decision to restore and expand the Medicaid coverage for adults who earn up to 138 percent of the federal poverty level. The Medicaid expansion, funded by the Affordable Care Act and an assessment on local health-care providers, has extended coverage to more than 390,000 Arizona residents as of this month, according to Arizona Health Care Cost Containment System figures.

Another 30,000-plus children from low-income families will be eligible for health insurance after Arizona lawmakers restored the KidsCare program. Coverage will begin this fall for eligible families that earn up to 200 percent of the federal poverty level, or about $49,000 for a family of four.