Friday, August 2, 2013
Aetna pulls out of Maryland's individual insurance exchange
(Reuters) - Aetna Inc has withdrawn its applications to sell insurance plans on Maryland's individual health exchange after it was asked to lower its rates by up to 29 percent, according to the state's department of insurance.
In an August 1 letter sent to the Department of Insurance, Aetna said the required rate modifications cut premiums too low on both its Aetna and Coventry products. Aetna closed on the acquisition of Coventry Health Care this spring.
"Unfortunately, we believe the modifications to the rates filed by Aetna and Coventry would not allow us to collect enough premiums to cover the cost of the plans, including the medical network and service expectations of our customers," Aetna said in a letter to insurance commissioner Therese Goldsmith.
Aetna was not immediately available for comment.
Maryland's Insurance Administration, which provided a copy of the letter, declined to comment.
The agency said in an explanation of its rate modification decision posted online that many factors went into its request for a lower rate, such as Aetna's assumptions about the health of people who apply for insurance on the exchange.
Healthy people cost less to insure than sick people.
(Reporting by Caroline Humer; Editing by Gerald E. McCormick and Dan Grebler)
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