State individual market dwindles with Aetna, Cigna departure
Aetna, along with Cigna and three other health insurers, will stop selling individual health insurance policies in Indiana.
Aetna says it only has 700 individual health insurance policies in the state, making up only a small fraction of the market, reports Bloomberg BusinessWeek. "The administrative costs of overseeing just 700 members are relatively high," says Aetna spokesperson Scot Roskelly.
Pekin Insurance, American Community Mutual Insurance, and Guardian Life Insurance of America also have decided to leave the state's individual market. Together, the five companies covered more than 20,000 state residents, or 10 percent of Indianans with individual health insurance, according to the Indianapolis Business Journal.
Although none of the insurers specifically referenced the medical-loss ratio (MLR) requirements, Indiana's Deputy Insurance Commissioner Robyn Crosson said the MLR is the real reason they are leaving the state's individual market, according to the Evansville Courier & Press. Only 44 of the 63 health insurers operating in Indiana last year met the 80-percent MLR threshold, meaning that Indiana's health insurers would have had to return nearly $30 million to members if the MLR rule was enacted last year, notes the Indianapolis Business Journal.