Aetna reduces small-business coverage

Doctors may end up with more uninsured patients as a result, some say.

By Cheryl Jackson, AMNews staff. Aug. 6, 2001.

Aetna Inc. is dropping some small-business coverage as it focuses on a more profitable medium-size market, the company said.

"We see a unique opportunity that has been largely untapped in the past," said spokesman Roy Clason Jr.

The result of such moves, physicians and small-employer advocates say, likely will be more patients left without health coverage.

"It does impact on practices because it increases the amount of uninsured," said Tampa, Fla., orthopedic surgeon Michael Wasylik, MD, a member of the Florida Medical Assn.'s managed care committee. "Insurers selectively look for large groups and don't want to insure small groups or individuals."

Aetna will offer more tailored plans to mid-sized businesses, those with 51 to 3,000 employees.

Medium-size and large businesses more often are self-insured, and hire companies such as Aetna to administer health plans. With such accounts, Aetna would get fees without assuming financial risks. Small businesses are more likely to be risk accounts that have insurers paying claims, Clason said.

Affordable health care is the most pressing issue facing small businesses, and any insurer retrench in the market means that small employers have to face higher premiums or not offer health insurance to their workers, small-business backers say.

In 1995, 78.8% of U.S. businesses had fewer than 10 employees, and about 99.7% had fewer than 500 employees, according to the U.S. Small Business Administration.

"For larger companies, it's a cost of doing business. So they don't have any concerns when the prices go up. When insurers leave a market, they find somebody else," said Angela Jones, spokeswoman for the National Federation of Independent Business, a typical member of which has five to seven employees. "It's more difficult for small businesses." [...]