* Aetna CEO says will not extend canceled policies further
* CEO cites improved cooperation with Obama administration
* CFO fears missing enrollments due to technical errors
By Caroline Humer
NEW YORK, Dec 12 Aetna Inc has decided
not to reinstate or extend individual health insurance plans
that are being canceled with the advent of the U.S. Affordable
Care Act because the time frame is too short.
Aetna is the largest insurer yet to announce a decision on
how it would proceed across the United States after President
Barack Obama said last month that insurers could extend these
health plans under a temporary transitional policy.
Aetna's move means that some consumers, who are required to
have health insurance in 2014 or pay a fine, will need to buy a
new plan for 2014. Aetna CEO Mark Bertolini made the comments at
an investor meeting on Thursday.
Aetna, the third-largest U.S. insurer, declined to say how
many individuals have plans that are being canceled or how many
were offered early renewals on their expiring 2013 plans to
enable them to continue coverage into 2014.
The company would have had to seek approvals for rate
increases across the United States, which it said would distract
it at a busy time of year.
Aetna's move is in contrast to some state-based Blue Cross
Blue Shield plans, such as BCBS of Florida and BCBS of North
Carolina, which have said they would extend these plans under
the transitional policy.
Obama made the policy change allowing insurers to extend
health plans under a temporary policy after hundreds of
thousands of individuals received notices that their plans were
being canceled. The cancellations became a political issue
because Obama had promised Americans that if they liked their
plan, they could keep it.
Aetna said that it has offered early renewals on plans,
which allow consumers to keep their coverage for up to a year
longer and into late 2014.
"We talked to the insurance commissioners and the insurance
commissioners have agreed with us. If we were to go to all those
states, refile all those plans, refile all those rates and do it
in time for Dec. 23, we would have paid attention to nothing
else," Bertolini said.
Consumers must decide whether to buy plans on the exchanges
by Dec. 23 for coverage to start on Jan. 1, 2014.
Aetna is offering plans in 16 states, which means it covers
about 30 percent of the exchange marketplace. The exchanges,
created under the Affordable Care Act, opened on Oct. 1 to sell
plans for 2014. Technology problems have hobbled the ability of
consumers to sign up and highlighted the cancellation issue.
Some state insurance commissioners have said they will not
allow these plans to continue while others have said they would
allow insurers who rushed early renewals in by Dec. 31 to
continue them in 2014.
Still other state commissioners have simply left it up to
the insurers to decide. A few million plans were due to be
canceled in 2014 and it is not clear yet how many people will in
fact lose coverage.
Aetna said it expects to gain customers in only about 15
percent of the marketplaces where it is priced the most
Bertolini said he expects the public health insurance
exchanges, which are under attack by Republicans, to survive the
"By 2015, if we get it fixed right, it'll be a new start,"
In addition to front-end issues, the website has also had
problems communicating data about enrollees to the insurance
companies. The U.S. government said last week that over the
first two months running the exchange, one in four transmissions
had errors. That rate is now about one in ten, the government
Aetna said it is still seeing these problems, but could not
provide an estimate of how many submissions have errors.
Aetna Chief Financial Officer Shawn Guertin said he is
worried about consumers being confused about whether they are
enrolled in a plan.
"With where we are now it inevitably will happen," Guertin
said in an interview. "We tried to extend our payment dates to
head that particular situation off, but when you look at the
number of applications that we have and you look at the number
of people that have actually paid for January 1 coverage, it's a
relatively low number as a percentage."
"It does worry me a little bit whether people actually
understand they have to pay that first month's premium," he
said. Aetna has extended the payment date to Jan. 8 for Jan. 1
Bertolini said it is important to get the information right
in time for January and that the company has been working
closely with the government.
"We're coming up with workaround solutions in case things
aren't ready," he said. "There is a lot of that cooperation
going on now, whereas in the past it was pretty much hands off,
but once the stuff really hit the fan there was a lot of