Aetna has withdrawn its application to sell individual health insurance plans through a public exchange after the state Insurance Department told the insurer its proposed rates were too high.
Before an insurer can sell health plans, the rates must be approved by state regulators at the Insurance Department. If the regulators deem the rates to be too high, the Insurance Department modifies them to a lower rate. In this case, Aetna did not accept the modified rates.
“This is not a step taken lightly, and was made as part of [a] national review of our exchange strategy,” Aetna spokeswoman Susan Millerick said in a prepared statement. “Unfortunately, we believe the modifications to the rates filed by Aetna will not allow us to collect enough premiums to cover the cost of the plans and meet the service expectations of our customers.”
The Insurance Department said Aetna’s price reflected a 10 percent assumed increase in medical and pharmacy services, and the department wanted that revised to 8.5 percent. The department also did not allow for an 8.1 percent risk adjustment. The department doesn’t allow risk adjustments in the first year of pricing.
Kevin Counihan, CEO of Connecticut’s health exchange, said consumers will have a broad number of choices even without Aetna. The goal of the exchange is to bring affordable, quality health care to Connecticut residents and small businesses, he said.