| NEW YORK
NEW YORK Dec 12 Aetna Inc, the third
largest U.S. health insurer, said on Wednesday that by 2014 it
expects to be part of about 15 healthcare exchanges being
established under government reforms.
Aetna, one of the companies on the front lines of healthcare
changes in the United States, told analysts and investors that
it believes an increase in the number of customers from the new
market places will likely contribute to its growth.
An estimated 30 million more people are expected to join the
insured over the next decade because of the U.S. Patient
Protection and Affordable Care Act of 2010. Millions of those
will seek their health insurance through the exchanges.
States have until Dec. 14 to decide whether they will
participate in a state-based, federal or partnership exchange.
About 18 states have said they will create their own state-based
exchanges and 18 others plan to default to a federal exchange,
according to the Kaiser Family Foundation, a non-profit health
The shift to exchanges is fundamentally changing the managed
care business, Aetna executives said during Wednesday's meeting
with analysts and investors.
"More and more consumers are going to be buying their
healthcare, even if the employer-sponsored system survives,"
Chief Executive Officer Mark Bertolini said. "A lot of things
that we do today are no longer necessary to the end buyer."
Aetna said profits will be helped by cost controls and
growth of carefully managed care organizations -- networks of
doctors that work together -- and expansion in government
programs, such as Medicare for the elderly and Medicaid for the
poor, and Aetna's pending purchase of Coventry Health Care Inc.
Aetna expects earnings of $5.40 per share in 2013, below
analyst estimates of $5.52 per share according to ThomsonReuters
I/B/E/S. It sees revenue growth of 9 percent in 2013.
Competitors such as UnitedHealth Group Inc and Cigna
Corp also gave weaker than expected 2013 earnings
outlooks during their year-end meetings with analysts and
investors. Aetna shares rose about $1.96 to $46.43 in midday New
York Stock Exchange trading.
Aetna, whose $5.6 billion acquisition of regional insurer
Coventry is being looked at by antitrust regulators, said that
it still expects the deal to close in the middle of next year.
It said it has not run into any issues that are beyond its
Aetna Chief Financial Officer Joe Zubretsky said in an
interview that Aetna had not factored the possibility of the
United States going over the so-called fiscal cliff into its
2013 outlook. The "fiscal cliff" is a combination of mandatory
spending cuts and tax increases that will go into effect at the
beginning of next year if a deficit cutting resolution is not
reached by U.S. lawmakers.
Aetna's outlook is based on a cautious view of the economy
and one in which unemployment remains at about 7.5 percent and
interest rate returns remain extremely low, the company said.
"We're pretty much assuming the cliff gets solved,"
But he said the company is concerned and guarded against the
possibility that it is not resolved. If that does happen, he
said U.S. employees poised to lose their jobs and health
insurance may increase use of medical services, or Aetna's large
employer business may decrease as companies cut back on
employees, both of which would likely hurt profits.