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by
Bryan Preston

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August 6, 2013 - 7:13 am

Insurance giant Aetna is sending strong signals that Obamacare is a major problem. Over the weekend the company announced that it would not sell individual insurance on the government-run exchange in Maryland. The state government had ordered Aetna to sell insurance below cost in the state. In a letter in reply, Aetna said that it could not do that, and therefore would not sell insurance in the state.

In an August 1 letter sent to the Maryland Department of Insurance, Aetna said the state’s requirement for rate reductions off its proposed prices would lead it to operate at a loss. The rate reductions include products from Aetna and Coventry Health Care, which it bought this spring.

“Unfortunately, we believe the modifications to the rates filed by Aetna and Coventry would not allow us to collect enough premiums to cover the cost of the plans, including the medical network and service expectations of our customers,” Aetna said in the letter to insurance commissioner Therese Goldsmith.

According to online documents, Aetna had requested an average monthly premium of $394 a month for one of its plans and the agency had approved an average rate of $281 per month.

Now Rare reports that a similar edict from the state of Connecticut is causing Aetna to abandon that state, too.

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.

Government bureaucrats are ill-equipped to set prices on anything, including complex insurance packages that have to take into account mandates to cover pre-existing conditions.

If the Republicans don’t make an issue of Obamacare’s multiple and massive failures in 2014, they don’t deserve to re-take the Senate.

 

Bryan Preston has been a leading conservative blogger and opinionator since founding his first blog in 2001. Bryan is a military veteran, worked for NASA, was a founding blogger and producer at Hot Air, was producer of the Laura Ingraham Show and, most recently before joining PJM, was Communications Director of the Republican Party of Texas.

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All Comments   (4)
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I'm surprised that Bryan didn't mention a truly ironic aspect about Aetna: It is heaquartered in Hartfort, Connecticut!
37 weeks ago
37 weeks ago Link To Comment
What I foresee is this, concerning medical insurance. If the communists/socialists continue to interfere in the insurance business, the government will have to take over insurance, which means social security for all, which means tax rates will be increased. Don't think the federal government won't tap into that so called locked box of Social Security money (LOL).
37 weeks ago
37 weeks ago Link To Comment
Is there anyone in government that can do math? They imagine insurance is like a "stash" of money they can tap into at will. As the good prof. says, "Something that can't go on forever won't"
37 weeks ago
37 weeks ago Link To Comment
government assumes that business can sell at a loss and make it up in volume.

morons
37 weeks ago
37 weeks ago Link To Comment
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