HumanaInc. will stop selling individual plans on health exchanges in atleast four states in 2017 in a bid to manage its exposure to acostlier-than-anticipated slice of the company's membership.
The health insurer notified regulators in Alabama, Virginia,Kansas and Wisconsin that it would exit their respective individual exchangemarketplaces, according to notices sent to the state insurance departments inApril and May. Those departures will affect a combined 25,302 enrollees, thevast majority of which purchased coverage in Alabama.
Alabama will only have one insurer participating on itsindividual exchange after Humana drops out, unless a new company decides toenter the marketplace.
Humana Product Compliance Process Owner Jane Rouse in eachof the four letters sent to state regulators said the plans would bediscontinued at year-end 2016. Policyholders will receive notification at least180 days prior to the discontinuance, she added.
Humana, which Bloomberg News reported is selling plans in 15states in 2016, is the second major national insurer to say it would leavemultiple exchange markets in 2017. UnitedHealth Group Inc. in April said that it would the majority of itsexchange plans in 2017 after suffering steep losses in the individual market.The company has since notified 26 states that it will no longer sell policieson their exchanges.
Humana has similarly struggled to turn a profit on itsexchange-based business, establishing a $189 million premium deficiency reserveto absorb losses tied to individual commercial policies. In its May 4first-quarter earningsreport, the company said that it would consider exiting certain markets ordropping plan offerings on and off the exchanges in an attempt to improve theprofitability of its individual commercial population.
The insurer had 875,700 individual commercial enrollees asof March 31, down 21% from the prior-year period.