Aetna to exit Central Indiana HMO market; Ohio division lost $50 million

  1. Aetna to exit local HMO market
    Insurer telling members of U.S. Healthcare and Prudential HMOs that plans will close at year-end.

    By Jeff Swiatek
    Indianapolis Star
    July 06, 2001

    Aetna will bail out of the HMO business in central Indiana, including dissolving the Prudential Health Care HMO that it acquired in 1999.

    Health maintenance organizations are just too hard a sell in the Indianapolis market, said the giant Hartford, Conn., insurer.

    "The HMO product was a product that just did not sell well for us in Indianapolis," said Jack Bellante, general manager for Aetna in Indiana and Kentucky.

    Aetna has 5,000 members in its Aetna U.S. Healthcare HMO in the Indianapolis area. It was set up less than two years ago. Aetna has another 34,500 members in the Indianapolis metro region who are in the Prudential plan.

    Renewals won't be offered to those members after Jan. 1 of next year, said Aetna, which has been notifying members by letter.

    Aetna still will sell health coverage in central Indiana through preferred provider groups, or PPOs, and indemnity products, such as dental and group life plans.

    Aetna didn't disclose how many PPO members it has in the Indianapolis area. PPOs have proven more popular in Indiana because they offer more choice in picking family doctors and seeing medical specialists, Bellante said. HMOs tend to limit doctor choices in an effort to keep medical costs down.

    Bellante wouldn't say if the plans being shut are losing money.

    Aetna still will serve HMO customers in other states and in 11 Indiana counties near Chicago, Louisville, Ky., and Cincinnati.

    The Aetna U.S. Healthcare HMO that primarily serves the Chicago area lost nearly $7 million last year, while the Aetna U.S. Healthcare HMO of Ohio lost $50 million, according to state filings.
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