Aetna Latest Out of Ind. Individual Health Market

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Aetna latest out of Ind. individual health market - Forbes.com

INDIANAPOLIS -- The nation's third-largest health insurance company is the latest to leave the individual policy market in Indiana in another sign of diminishing competition to benefit consumers who purchase policies through a state insurance exchange under the federal health care overhaul.
Aetna ( AET - news - people ) spokesman Scot Roskelly said Wednesday the carrier currently has only 700 individual health insurance policies in Indiana, making up only a small fraction of the market, and will remain in other sectors, including small group coverage.
"The administrative costs of overseeing just 700 members are relatively high," Roskelly said.
However, Crosson, in her letter, said Aetna was leaving the Indiana individual market over a rule in the federal health care overhaul that insurers essentially must dedicate 80 percent of the premiums they collect to medical care. Anything less than 80 percent would be paid as rebates to policyholders the following year.
Crosson said Aetna and four other insurers - Pekin, American Community Mutual, Cigna ( CI - news - people ), and Guardian Life - cited the 80 percent rule, known formally as the medical loss ratio, as their reasons for leaving the individual market in Indiana over the past year.
Indiana's health insurance market for individuals is dominated by Indianapolis-based Anthem ( ATH - news - people ) with a 65 percent share, according to Crosson's letter and the state's Medicaid actuary, Milliman Inc. Anthem and four other companies control 90 percent of the market.
However, consumer advocates say the exodus of Aetna and other companies likely will result in fewer choices and higher costs for consumers under health insurance exchanges to be established in 2014 under the federal health care overhaul. The exchanges will pool the resources of large groups of people to offer more affordable health insurance.
About 200,000 Indiana residents now have individual polices rather than employer-provided coverage. About 875,000 have no insurance at all, a number Milliman forecasts to fall by about half by 2019 while the number of individuals with policies swells to between 450,000 and 875,000.
"In Indiana and most other states, the anticipation is that most of the new coverage offered through the exchanges will be through individual policies," said public health insurance advocate David Roos of Covering Kids and Families of Indiana. "Aetna is not a small player."
The Insurance Department's health care director, Logan Harrison, said it's not clear how Aetna's departure from the individual market will affect an Indiana insurance exchange offering individual coverage. He stressed that the state has not decided yet whether it will create an exchange itself or leave it up to the federal government.
The Insurance Department has asked CMS for a waiver that would phase in the 80 percent rule, which took effect Jan. 1, over several years. It has proposed a medical-loss ratio of 65 percent this year, increasing gradually to 80 percent in 2015. It's not clear when CMS will decide whether to grant Indiana a waiver. Other states also have requested waivers.
 
What is it about Indiana that is scaring everyone away? It corn, auto racing and Colts football bad for your health or something?
 
Coach Knight caught the raw end of the deal, he did things the right way, was tough, taught his players to play good ball and to be good people, and he stayed the same while popular culture passed him by.

He is one of the greatest basketball coaches of any era.
 
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