Aetna and Cigna among five health insurers leaving Indiana « Health Insurance Advisory

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new healthcare reform lawThe new healthcare law, called the Patient Protection and Affordable Care Act (PPACA), represents comprehensive healthcare reform legislation signed into law on March 23, 2010. It contains numerous provisions designed to protect consumers and promote low cost medical insurance, including many new taxes to pay for the cost.

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Aetna and Cigna among five health insurers leaving Indiana

Author: Administrator | Aug 23 2011 | Aetna Health Plans, Cigna Health Insurance, Indiana

Five health insurers, including two of the nation’s largest, have decided to stop selling individual medical insurance plans in Indiana —a trend that prompted the Indiana Department of Insurance to request a phase-in of key parts of the 2010 new healthcare law.

Aetna Health Plans and Cigna Health Insurance, which are the third and fifth largest health insurers respectively, have announced their departure from Indiana’s individual health insurance market.

In addition, Pekin Insurance, American Community Mutual Insurance Co. and Guardian Life Insurance Co. of America also have decided to leave the individual market. The five companies covered more than 20,000 Hoosiers, or about 10 percent of all those who have individual health insurance.

Their major complaint is about the new health law’s requirement that at least 80 percent of premiums be spent on medical bills. That new rule, known formally as a medical loss ratio or MLR, takes effect this year for all individual medical insurance plans the insurers hold, not just new health insurance policies.

The insurance companies argue that the marketing and administrative expenses on individual medical insurance plans are so high that they cannot transition so quickly to the new standard.

The Indiana insurance department worries more health insurers may follow—particularly small, local insurance plans and insurance plans operated by health care providers. One example of such a plan is Indianapolis-based Advantage Health Solutions, which is owned by four hospital systems, including St. Vincent Health and Franciscan St. Francis Health.

So Insurance Commissioner Stephen Robertson asked the Obama administration in May to grant Indiana a waiver that would delay the 80-percent rule until 2014. In late July, the insurance department disclosed the letters of withdrawal from the five insurers and a sixth from an insurer contemplating an exit.

“The imposition of the MLR requirement effective January 1, 2011, would be disastrous to many individual health insurance companies, their customers, and their employees,” Michael Abbott, CEO of Iowa-based health insurer American Enterprise Group, wrote in a Nov. 22 letter to Robertson.

He noted that, if companies such as his leave the market, customers with pre-existing conditions could be left without coverage until the new healthcare law requires that insurers take all applicants in 2014.

If the above cancellations impact you or if you want to save money on Indiana medical insurance, then visit healthinsuranceadvisory.org. Our online medical insurance quotes will allow you to shop and compare individual medical insurance and health insurance for the self employed from leading insurance companies. We can also help you secure inexpensive dental insurance too.  Get started today!

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