Former Aetna CEO Ronald Williams said that the Affordable Care Act was flawed and that the exchanges are unsustainable, in an interview with CNBC.
Many insurers began pulling out of the exchanges last year, citing that there were not enough young, healthy individuals signing up for coverage to compensate for sicker enrollees.
"I think [Obamacare] was flawed," Williams said. "In health care you really need a balance of people who need health care today, tomorrow, and in the future."
Additionally, "the rate structure was set in a way that those who needed health care today got the most affordable premiums. That means typically older citizens got a much better deal."
Williams said that younger individuals paid more for coverage and didn't see the value in it so they didn't sign up.
"We're missing their premiums and that's causing the overall rate of increase to be greater and to help make the insurance pool unsustainable financially," he explained. "At the direction it's going the exchanges are unsustainable."
The former CEO said he believed most of the consumer friendly features of Obamacare such as young individuals staying covered on their parents plan until 26, preventive services, and keeping coverage for those with preexisting conditions would remain in place, regardless of Republican plans to repeal and replace the law.
In trying to reform Obamacare, Williams said there needs to be much more competition and flexibility.
"I think the practical reality is that when you give people the absolute most comprehensive plans, there is a cost to do that and that shows up in the premium and that's one of the reasons young adults haven't been buying the product because they don't really see the value in it," he said. "I think we do need lower costs, more flexible plans, so we need a range of options as opposed to a one-size-fits-all approach."
Aetna announced in August of last year it would drop out of 70 percent of the counties in which it offered coverage.
"In light of a second-quarter pretax loss of $200 million and total pretax losses of more than $430 million since January 2014 in our individual products, we have decided to reduce our individual public exchange presence in 2017, which will limit our financial exposure moving forward," said Aetna's current CEO Mark Bertolini. "Providing affordable, high-quality health care options to consumers is not possible without a balanced risk pool."
"This population dynamic, coupled with the current inadequate risk adjustment mechanism, results in substantial upward pressure on premiums and creates significant sustainability concerns," according to Bertolini.