Humana (which is being acquired by Aetna, Inc.) announced on Friday that it probably won’t collect enough money to cover costs for some customers who purchased individual plans. This follows UnitedHealthcare’s November announcement that they are considering withdrawing from the troubled ACA marketplace as well. It’s expected that both carriers will exit the Obamacare markets after next year to due heavy losses.
The news comes as no surprise to analysts in the industry as many insurance companies are seeing shortfalls in premium collected versus claims spent on consumer’s medical claims. Humana is still working to determine exactly how much of a shortfall they are faced with, but plans to have a better idea in time for their fourth quarter earnings call in February.
This does not mean they will be unable to pay claims or are in financial trouble. Insurance companies have contingency plans for such issues and Humana will address their shortfall with their premium deficiency reserve.
It’s not all bad news for Humana though, they are expected to add members in their Medicare Advantage program and their prescription drug plan.