Skeptical about Aetna

After a five-year hiatus, insurance heavyweight Aetna Inc. has returned to Colorado's small-group health insurance market.
The insurer has been meeting with brokers and already has sold plans with a Sept. 1 effective date. The company is offering 13 plans for small employers, including two high-deductible plans that are compatible with health savings accounts.
In 2001, Aetna announced it was pulling out of Colorado, saying it couldn't turn a profit on its plans for small businesses.
It dealt a huge blow to the state's small-group market, which includes self-employed individuals and groups of two to 50 people. In 2000, Aetna's was the state's second-largest small-group carrier, and the move affected about 100,000 members, who had to either find new coverage or go without it.
Bill Berenson, Aetna's regional head of sales, based in Chicago, said the company is "completely different" than it was five years ago. It has a new management team and a better understanding of which products are profitable, an understanding it lacked five years ago.
Aetna grew rapidly before it pulled out of Colorado's small-group market -- from fewer than 30,000 members in 1999 to more than 100,000 in 2001. Aetna's plans for small employers were the cheapest in Colorado. But the prices were so low, the insurer couldn't turn a profit.

Of course, we will include them in our comparisons for our small business clients to get an idea of what their options are. When people are given this information and are aware that the company has recently pulled out of Colorado, about half will still decide to take the risk if the price is right.

But Aetna's return to Colorado comes as the state's small-group market has been shrinking. The number of people getting health insurance through Colorado's small-group market dropped for the fifth year in a row in 2005, according to the Colorado Division of Insurance. Last year, there were 358,264 employees and dependents covered in small groups, compared with 456,151 in 2001. That's a 27 percent decrease.