Aetna Pulls Out Of Connecticut Health Exchange

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Aetna has withdrawn its application to sell individual health insurance plans through a public exchange after the state Insurance Department told the insurer its proposed rates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.

For consumers, the exchange, called Access Health CT,  will be the only place where consumers may receive a federal subsidy to help pay for coverage. People who earn up to 400 percent of the federal poverty level can get a subsidy. The subsidies will be available to any individual making as much as $44,680 or a family of four making up to $92,200.

“It’s not even just the subsidy though,” Counihan said. “These exchanges are a new way of buying insurance. It’s a simpler way.”

The Hartford health insurer also is withdrawing its application to offer individual health plans through Maryland’s health exchange, though Aetna said it will continue to offer small-group plans on the exchange because Maryland requires its  participation. Aetna also pulled out of Georgia’s exchange entirely.

Health exchanges are online marketplaces where people will be able to buy health insurance starting Oct. 1 for coverage next year. The exchange will be for people who don’t already have coverage through an employer or through government-funded programs such as Medicare and Medicaid. Health exchanges are a key part of the Affordable Care Act passed by Congress and signed into law in 2010.

“We continue our analysis of Aetna’s overall company strategy, including the impact of our Coventry acquisition upon our larger business priorities,” Millerick said. “This acquisition closed in May, after our exchange … application was submitted to the state.”

Aetna will continue to sell health plans to individuals, just not on the Connecticut health exchange. The company currently has about 32,000 individual customers in the state.

“We have appreciated the chance to work with the Connecticut Insurance Department for the past months on a variety of key issues regarding [Affordable Care Act] implementation,” Millerick said. “We will continue to work with the department and exchange leadership and will evaluate exchange participation in future years.”

Aetna isn’t the first to shrink back from original intentions to sell plans on the Connecticut exchange.

On July 26, ConnectiCare Benefits Inc. announced it was withdrawing its application to offer health insurance in the small-group market sold through Access Health CT. ConnectiCare President Michael Wise said at the time that the company needs to focus on the needs of individual purchasers and that the company is committed to the success of Access Health CT.

The remaining insurers selling health plans in the individual market through Access Health CT are Anthem Blue Cross and Blue Shield in Connecticut, ConnectiCare Benefits and Healthy CT. Remaining insurers in the small-group market selling plans through the exchanges are Anthem, Healthy CT and UnitedHealthcare.

Lt. Gov. Nancy Wyman, who chairs the Access Health CT board, said in a prepared statement: “People will still be able to choose from a very comprehensive range of quality, affordable coverage options offered through [Access Health CT]. This decision will not affect our reaching a goal that many of us have been working toward for a long time, and for which the people and businesses of Connecticut have waited long enough.”

About Matthew Sturdevant

Full-time staff journalist at The Hartford Courant and magazine freelancer with a master's degree in writing from Dartmouth. My work has appeared in The Los Angeles Times, The Chicago Tribune, Taiwan News, The Baltimore Sun and many other news sources. My blog has been referenced by, the Kaiser Family Foundation, the Georgetown Law Library and a number of organizations in healthcare and business. Sturdevant’s blog is "a well-written wealth of ideas," said The Donald W. Reynolds National Center for Business Journalism, (, May 18, 2011). I have experience writing for newspapers, magazines, Web sites and blogs as well as shooting and editing video. I made regular appearances on news-talk radio and on the NBC affiliate station in Corpus Christi, Texas. I made occasional appearances on the Fox affiliate in Connecticut promoting Hartford Courant articles.

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32 thoughts on “Aetna Pulls Out Of Connecticut Health Exchange

  1. Aki Bola

    One step closer to the single payer system coveted by our overlords. Don’t be alarmed, there is a government bureaucrat somewhere who really cares about you, they just need to clone the successful DMV model of efficiency.

    1. James

      The DMV is like taking a trip to Disney World compared to dealing with the cruelty and incompetence of private health insurance companies. At least the DMV follows rules.

      1. Bob

        You don’t think the DMV is cruel and no, the IRS does not follow rules as they routinely subject republicans, libertarians, conservatives and tea party organizations to heightened scrutiny. Is it that you haven’t heard about this Obama scandal, you don’t believe it or you think it’s ok that they target political adversaries?

        1. Keith

          Bob, Steven, dave, ct girl and all here who get it,
          There is hope…if we know, there are many others who stand in the light. The battle by those fighting to hook their chain on the foundation of the Constitution to the other end of their Leninist tractors- is fought in time for the support of the ill informed, the ignorant and those dependent upon the government- waged against those who are informed and speak out with balanced facts -from experience. They bet that a busy life and endless distractions coupled to a growing group of ‘entitled’ voters will keep ‘enough’ who do know- too complacent to speak and to few to count and vote.

          The smallest flame casts a bright light through the dark…wonderful to see so many here fortified with experience, breadth of facts and truth.

          How brilliant our founding fathers were; so very well versed in history and current affairs with a rock solid foundation that we do this all for a higher purpose then any one mans view of a good life. They pledged their ‘lives, their fortunes and their Sacred Honor’ to one another in support of a free ‘We The People’ and a small, constrained government. They did this because they knew history and saw all others governments always fail when too burdensome upon the people they oversee.

          Aetna…a canary in the coal mine and I a health care provider and unhappy with the waste of time on this charade and travesty of health care reform in the thinnest of disguise for that ‘transformation of America’.
          Blessings, keep the faith.

  2. Steven Rosenbaum

    One wonders if the reporters and editors of the Hartford Courant, which provided a full throated endorsement of the ACA and condemned any individual or politician that dared to oppose it, will now look a tad deeper into this situation. On what basis, could they believe that 1/6 of the American economy would be better off in the hands of central planners? Oh yes…. when one works for a media outlet which acts as a lapdog for the political class, it is difficult to act in the capacity of watchdog for the working class.

  3. dave

    Obamacare is a disaster that gets worse everyday.

    It will make healthcare worse for every American (except the rich). Just wait, this is never ending train wreck.

    1. Scott

      Al, serious blunder? The amount of money made or lost on this deal is a pimple on their butt. At best its a distraction. They were pricing it as such.

    2. Geoffy4T

      Yeah, Al – you and Nancy Wyman know more about what’s in Aetna’s best interest than their management!

      The only thing this state has a surplus of …is ARROGANCE.

  4. James

    Aetna has been aggressive in showing is true colors: the month it leaves a number of exchanges, its CEO gets hundreds-of-thousands of shares promised to him if he will increase profits. This is not a surprise, and not bad for patients: it’s simply Aetna putting profits and CEO wealth first.

    Why did the CT governor cave on the SustiNet public option to appease these jerks?

    1. Geoffy4T

      So…Comrade James…whose interest should Aetna put first: Dan Malloy’s? Yours? Aetna is a privately-owned company, responsible only to their shareholders. Just like the schools and buildings in your town are owned by your town’s taxpayers. I’m sure you wouldn’t appreciate me waltzing into one of your town meetings and start lecturing you on what your responsibilities to me are!

      1. James

        Comrade Geoff, it becomes a problem when Aetna spends millions of dollars to prevent America from having the publicly-financed, universal health care system — even a public option — that it needs and deserves. Health care is not improved by the free market. Mark Bertolini simply sucks unearned economic rent out of our economy through his leadership of a health insurance corporation that does nothing — adds zero value — to improve the finance or delivery of health care in this country.

  5. baborn3

    John Larson championed this travesty, ObamaCare. Will he pay the price at the next election? … Not in this partisan, Union run, low information voter State!

  6. Joe Brislin

    This event should cause concern for all Connecticut residents . When an inexperienced exchange staff reflects the arrogance of our current gov and states that a Ct insurance company with a vast history of experience in pricing is being greedy one can only conclude there is trouble ahead. As a former Aetna employee I know that Aetna always sought fair pricing. In spite of the derogatory comments of our two Ct Senators I am quite tired of the unsubstantiated attacks on Connecticut,s insurance companies. A debate between a strong Aetna Actuary and our Exchange expert would be quite embarasing for the state and the Hartford Courant.

    1. James

      Really!? Our Senators honestly and rightfully attack a vile insurance industry — Aetna included — that — through its obstructionism — has allowed for 45,000 Americans to die every year for lack of health insurance. If Aetna always sought fair pricing, it wouldn’t be taking its ball and going home in Georgia, California, Maryland…and Connecticut. Aetna is the whining 10-year old boy who ‘takes his ball and runs home’ when the referee says that he is cheating.

    2. CT Girl

      Thank you sir,
      My father WAS the chief actuary at the Aetna for over 20 years. You are absolutely right. He has been gone for many years, but as a stockholder, (which many with pension funds are) I thank goodness they have made this business decision. Insurance is a science, not a social policy.
      I, for one, am tired of being told I’m ‘bad’ for taking my responsibilities seriously and taking care of those around me instead of turning it all over to the great and powerful (have no REAL job) government officials.
      Thank you again, we all need to speak up, without venom, but with the truth.

  7. JoanieW

    Protest Obamacare and tell your Insurance Company NOT to cover your kids up to age 26, and tell them you DONT want your pre-existing conditions covered, and make them guarantee they will put a lifetime CAP on your benefits..YOU SHOW EM’

    1. Bob

      Maybe the government should not tell a shareholder-owned company how much it can charge. CT”s democrat controlled government and bureaucracy have made this state a bottom five contender in almost every economic statistic, among them cost of living, taxes on gasoline, cigarettes, alcohol, property, cost of utilities, income tax, etc, etc. Businesses HATE this state and its massive regulations, thanks largely to Blumenthal suing every corporation he could squeeze a few dollars out of and get his photo in the compliant Courant. Almost 18% of every resident works for a municipality, also a national worst. Wealth leaves, corporations leave, our college grads leave but you balme the insurance companies for wanting to make a profit and give the gov’t a pass for telling them what profit is acceptable. Please stop voting and move to a socialist state where you will have no intellectual opposition.

  8. Geoffy

    That’s right, folks! Tell those dirty insurance companies to get out of CT! And take their thousands of jobs with them! Who needs ‘em?


    1. James

      Couldn’t hurt the state to lose an immoral industry and replace it with something that does work of actual socio-economic value…if they want to leave, glad to to show them the door!

  9. cupcake

    Can some state department tell my town that its property taxes are too high? Oh, wait a minute, those are never deemed too high. Never mind.

  10. InexperiencedGenXConsumer

    Aetna is making a business decision based on their strategic goals and vision. Businesses, and similarly people, are allowed to make such decisions with their best interests in mind. Perhaps Aetna believes that the exchange model, as currently developed, cannot be profitable (or profitable enough). Only time will tell if that assumption is correct. However, if the market responds favorably to the existence of an exchange model, Aetna could very well reverse course and add their offering to the exchange. Publicly traded companies like Aetna are driven by the almighty dollar – as they should be, it’s the American way – but the power of spending that almighty dollar is held by the consumer. If consumers choose exchange regulated plans over their other available options, then Aetna (and / or any other Health Insurance company) will find a way to improve their offering in that market.

    A completely separate discussion from the above – is the current relationship between Health Insurance companies and Healthcare Providers. Both parties, again, are ultimately out to make money (Hooray, Capitalism!). Insurance Companies take in a fairly standard amount of revenue based on monthly premiums, but can maximize this revenue by “negotiating” the costs of services with Healthcare Providers. While the Providers revenue is almost solely based on the number and cost of services. Over the course of a few decades, we’ve seen this relationship develop into an ever-more-profitable cycle of (1) Insurance Company “negotiate” a lower cost of service, (2) Healthcare Provider raise the costs of services to recoup similar (or higher) levels of profit, (3) repeat. What this has produced is vastly artificially high costs of services, for which less and less is covered by Insurance; resulting in less people seeking care and / or people seeking emergency care without insurance. This dynamic is not beneficial for the average consumer – and the state of our nation’s health suffers as a result.

    I’m interested to see if the Government’s intervention (via the implementation of the moderated and regulated exchange markets) will start to quell the current cycle. Because, regardless of the solution, something needed to happen; it might as well be this. However, all things being equal, I do believe that a similar type of moderation will also be necessary on the Healthcare Provider side (to monitor actual vs. charged costs). But it may be more difficult to implement that program if people are instead convinced that they are “death panels”…

  11. Samrt Charlie

    Wait a minute. What is Aetna guilty of doing wrong here? They said they are committed to offering individual health policies in CT. However, they are choosing to not sell it through the CT Insurance Exchange.

    Put emotion aside and think.

    a) Aetna is a private (non-governmentally owned) business capitalized by its shareholders. Those shareholders require a return on their investment. If Aetna’s management team of extremely well trained actuaries and financial experts conclude they cannot put a product on the market that meets shareholder return requirements – they won’t and they don’t have to.

    I hold shares of Aetna as an investment. I bought those shares with the expectation that Aetna maximize its earnings and pay me a regular dividend payment. Nobody has called me from Aetna to say, “Gee, we’d really like to fit in with the feel-good crowd and offer products on the CT Health Exchange without getting a premium reflective of the risk and your required return. Is that okay?”

    BTW- I would say “no”.

    b) Many of the largest health insurance companies are sitting out the first year or two of the exchanges. This is really smart for two reasons.

    First, the Exchanges will have a huge number of logistical and operational issues. Not a knock on the Exchanges, but they are brand new and rushed into operation. Why would an insurance rush into that? They will tie time and money up dealing with all of the bumps in the road. Wait until the kinks are worked out.

    Two, they don’t know who they are going to get from a health condition perspective. If they can’t price to the risk, then the smart thing to do is to sit it out. The first year or two isn’t going to add up to much anyway.

    Note – the first in companies: Connecticare Benefits, Anthem, and Healthy CT are all non-shareholder owned companies.

    They will all rush in to fufill some sort of Johnny Do-Gooder role and get killed. They will have underpriced the risk, not understood the medical costs of the population they got, and absorbed all the costs of the poor operational environment.

    Two to three years from now; Aetna, United, CIGNA, Humana will use their patient business discipline, superior understanding of the market gained through reading the insurance filings put in by the first three companies, their scale/operational excellence, and access to cheaper debt and equity capital to enter the markets like Connecticut and under-cut the premiums by a huge amount.

    Of course, you all will be willing to pay the higher premium to suport the do-gooders. Ah, I didn’t think so

    I think I will buy me some stock – AET, CI, UHG, and HUM to start.

  12. pete

    What were those promises from the MESSIAH. And remember how Blumenthal Murphy and the rest of the ‘RAT party lobbied barry to EXCLUDE CONGRESS FROM BARRY CARE

  13. Francine

    These exchanges sure will make things simpler…..because there will only be one single company in it able to offer ONLY what the the government dictates they must offer . Gee I thought you lefties were all about choice…guess not!

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