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Aetna Individual Policy Consumers In California Will Have to Find a New Carrier By The End of The Year-Pulling Out of The Consum

Posted Jun 14 2013 11:08pm

We already knew that Aetna was not participating in the California exchange and this makes their participating even less as those who do not have coverage via their employer will need to find another carrier.  imageFor some, finding a new insurers may take a little time so best to look at it as soon as possible if this affects you.  Aetna, like other carriers, Humana and United for example are focusing more on the employer based insurance business.  This is getting a bit interesting as the California Insurance Commissioner called for Anthem to be removed from the small business option on the exchanges. 

We have read  about competition from private exchanges which number about 100 and this certainly looks to add to the idea that carriers are in fact moving in that direction.  Ok, so who would California replace Anthem with?  Anthem unlike the other major carriers has a large base of clients who are individual policy holders.  Just last month  Aetna announced a new focus on government and international business.   Anthem, other than smaller HMO type of plans may end up being the only major carrier to still cater to individual policy holders in California.  Sutter Hospitals created their own insurance plan and was going to participate but they pulled out too for another example with exchanges. Ok so the insurers have all modeled their profits and this seems to be the end result.  In 2011 Aetna stopped selling individual policies in Colorado.  We are seeing a lot of carriers focusing on government business and none larger than United with their efforts.  A United Healthcare subsidiary is building the federal exchange net too that all the states will connect to.

States Slowly Getting Insurance Exchanges Set Up as Federal Exchange Hub Built By United Health Group Subsidiary. QSSI Still Remains a Mystery

Ok now with the current events and perhaps more of those to come, did the insurers win this battle after all?  Their decisions have all been carefully calculated and modeled and lobbied.  You have to stop and think about it when you see how expensive the exchange service has become for both the feds and state governments and did they set this up to fail in this manner with HHS having egg on their face?  I kept saying that we needed leadership with some IT in their background to run HHS (from 2009) as without it, they are no competition for all the analytics and business models that are built almost on the hour by insurers.  Sad to say but it looks like the insurers have in a way embarrassed HHS when you look at all the money and the expensive IT infrastructures they are adding and adding and adding instead of having a better style of “project management”.  Sad.

I am not taking sides with the insurers by any means but do recognize how the government is so much at a disadvantage without people who understand math modeling and can’t grasp some of this first hand with some first hand experience and we all hurt because of it.  DeParle was probably smart in leaving when she did seeing this coming.  So the model that Aetna created told them to move in other directions for profits. Again look at the huge dollars United Health Group is making off the government, DOD and military and now Aetna announced their government focus.  United was early to the game with soliciting and suing DOD to get their business while others were still working with HHS, they saw available money and used their data and subsidiaries along with a lawsuit to get a bunch of it.   They created a subsidiary just to focus on getting Tri-Care business for goodness sakes.  Here’s what one subsidiary, LHI, of United does with VA exams and big DOD occupational health events:

“We have administered private occupational health services in support of various federal agencies including the Centers for Disease Control and Prevention (CDC), Federal Occupational Health Service (FOHS), Department of Defense (DoD) and the Veterans Health Administration (VHA). We support a wide variety of customers, including: National Institute for Occupational Safety and Health (NIOSH), U.S. Army Medical Command (MEDCOM), the Army Reserve, Army National Guard, Air Force Reserve, Air National Guard, Army Dental Command, Navy Reserve, Army Corps of Engineers, Coast Guard, Military Sealift Command and other Federal agencies. LHI also supports a number of private sector clients with occupational health services, including four of the Class 1 railroads operating in the United States.”

Aetna may not be too big to fail but United is certainly at that point with being so intertwined with many government entities, hospitals, physicians groups, HMOs and more.  Look at the SEC list of subsidiaries here and this does not list all of them that are sub-subsidiaries either, the daisy chains have more.  250 plus items listed here.   SEC Aetna listings 110 plus items and no daisy chains sub subsidiaries it appears.   When you open up Optum as an example there’s a whole new slew of sub, subs that all put profit to the United bottom line. 

So between models that identify profit markets and non participation as a whole with the insurance companies it looks like they kind of stuck it to HHS in a huge way…billions and millions for a complex system that we have no idea if consumers will use or be able to use and understand.  We have additional millions for navigators and assisters too…57 million just for that. Now I’ll be the devil’s advocate here, how many employees does it take to set up a private health insurance exchange..answer..3… if they come from Humana in this example.  In other words do you see what’s happening here with employer provided health insurance?  There’s about 100 private exchanges and you can bet the insurers will be marketing them as some of the insurance companies own some of them or have some kind of affiliation. 

One More Insurance Exchange Started by Former Humana Executive–Currently There Are Over 100 Private Exchanges in Place To Compete With State Exchanges

The sooner the government hires people that can help them see how private industry models for profit the better off we will all be.  Next send Congress off to school to learn about this too.

Again with all the millions and billions spent here on the exchanges, which in the original concept was not a bad idea, what in the world are we doing.  Steve Larsen, credited with writing most of the healthcare law doesn’t care much anymore as he left Sebelius and company and sits as a VP at Optum, subsidiary of United.    What’s up with that when a key regulator of the healthcare law leaves and takes all the secrets to the insurers modeling for profit…a pay raise for him for one would be an obvious.  Software builds on itself and thus it is easy as a developer to keep selling software on top of software until you get a huge mess.  Believe me, purchasing agents and others are an easy sell as the layers do exactly as promised but nowhere in the sale do you ever get the benefit of a good data project manager. 

At some point you need to have a modeling project manager take it all apart and rebuilt it, otherwise you have what we see now.  Insurers like this kind of business as it keeps prices up and money flowing to their pockets and they look at that almost hourly. If we had someone at the top who had some background in Health IT, some of this could have been altered, stopped or set in motion with a better model.  The model we have now keeps going up and up with money spent and so do the profits of insurers and it’s not all selling policies.  United is getting paid to build the federal exchange hub too and they don’t even want to participate anymore with such profitable business coming in via the military. 

Oh and don’t forget that when you look up LHI when we talk about the DOD and VA HER records, one more item to consider, the charting that LHI does for VA disability exams and the DOD events…goes right into the EHR charts, so guess what, perhaps one more entity that has to be considered for integrated records, to make it work with the United Healthcare subsidiary.   I understand why the CTO and CIO of the VA left when you start adding on those types of complexities and everyone just complains and has no clue on the fact that integrating the two systems goes way beyond the surface.  BD


Aetna Inc. AET -1.72% will stop selling health insurance to individual consumers in California at the end of the year, withdrawing as the federal health law is expected to reshape the market in 2014.

The pullout is likely to draw attention as California has become a focus of national debate over the law's impact. Supporters, including President Barack Obama, who highlighted the state in a recent speech, argue that it has shown the success of the health overhaul in encouraging competition and pushing down prices.

Insurance-industry experts say similar moves by other carriers in other states may emerge in coming months, as companies with limited market share decide to avoid the uncertainty tied to the law's changes.

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