Aetna, Inc., the third-largest health insurance provider in the U.S., has announced that it will be pulling out of the individual policy market in Indiana. The company is the latest in a wave of insurers that have been fleeing the Indiana market recently. The exodus is due, in part, to the waning competition in the state thanks to health insurance exchanges. Exchanges promise to bring affordable options to consumers, often at a price that insurers are unwilling or unable to match.
The insurer notified the Indiana Department of Insurance in April that it would be leaving the market. All individual health policies will be terminated on December 1st of this year, according to a letter from the company. The letter was made public by Insurance Commissioner Robyn Crosson as a means to inform Aetna customers that their coverage may be ending soon. While Aetna claims that their leaving the market is due to rising administrative costs and their inability to remain viable in the market with the coming of the exchange program, Crosson has a differing perspective.
In a letter written in response to Aetna’s announcement, Crosson insists that the reason for the insurer’s exodus is due to their unwillingness to adhere to new federal regulations. The regulation in question is one that requires insurers to pay at least 80% of the money they collect from premiums on improving medical care.
Both Aetna’s and Crosson’s letters can be found via the Indiana Department of Insurance website.