Are Aetna’s Moves a Bellwether or a Reaction to the ACA?
Leadership is often about making the right calls at the right time. In many cases, that means knowing when to stay and when to go. After a series of lost battles with regulations related to the Affordable Care Act, leaders at Aetna, one of the country’s largest insurers, began slowly pulling out of exchanges in various states. They say they can’t compete, even though some of their competition have managed to do so nicely.
Regardless of the reasons, when you can’t reach your goals doing what you’re doing where you’re doing it, you need to change. That led Aetna to walk away from the ACA exchange in Iowa, just the latest in a series of departures from various state exchanges.
This departure is a big loss for Iowans, who also saw Wellmark Blue Cross Blue Shield announce plans to leave the state after this year. The stated reasons for both companies are “uncertain risks.” They don’t know what they might be facing in the years to come, and they don’t believe it’s responsible to put their shareholders at risk. These companies are, after all, experts at mitigating and calculating risk, so it’s always front of mind.
This will certainly hurt the ACA in Iowa, though it could offer an opportunity for an enterprising smaller company to come in and dare to take the risk to gain a share of the approximately 30,000 people Aetna insured through exchanges in the state.
It’s a sign of exceptional leadership both to know when to stay and when to go. Like that old Kenny Rogers song, you win most when you know when to hold and know when to fold. In the case of Aetna, the mounting losses meant a need to lessen risk and shore up its individual policy division. That’s not an isolated decision. Several other major insurance providers have done the same thing. Humana has pulled out of exchanges in 11 states.
So, if it’s a bad deal for these big companies, why would it be a good deal for another company? That’s an important question for every business looking to expand its book of business while protecting what it has already built. The old adage is really true: one man’s curse is another man’s opportunity. The key is in knowing which is which … and when.
Timing is another major factor in these kinds of decisions. Something that’s right today may not be right tomorrow. And something that’s wrong today might be the best thing sometime in the future.
For Aetna, Iowa might not deliver what it needs, where a larger state may offer tremendous opportunity. Trying to think of these decisions as one size fits all is a good way to miss an opportunity on one side and stay too long on the other.