(Adds Molina comment)
By Caroline Humer
Nov 20 U.S. health insurers Aetna Inc
and Anthem Inc on Friday sought to reassure investors
that their Obamacare businesses had not worsened after
UnitedHealth Group Inc warned of mounting losses in that
Aetna and Anthem said their individual insurance businesses,
which include the plans created by President Barack Obama's
national healthcare reform law, had performed in line with
projections through October. Both backed their earnings
forecasts for 2015.
The announcements came the day after UnitedHealth cut its
earnings forecast and said it might exit the Obamacare exchanges
in 2017. It said it was losing money on that business because of
low enrollment and high costs.
Anthem remains committed to the exchanges and to "continuing
our dialogue with policymakers and regulators regarding how we
can improve the stability of the individual market," Chief
Executive Officer Joseph Swedish said in a statement.
Enrollment for 2016 exchange plans opened earlier this
In October, the U.S. Department of Health and Human Services
forecast about 10 million people would have plans next year,
significantly below industry expectations of 20 million.
Enrollment in 2015 also fell short of initial goals, and
insurers say that trend has made it difficult to price their
About a dozen start-up cooperative insurers have collapsed
this year, driven out of the business by paying more medical
claims than expected. Also, government payments to mitigate the
costs of insuring sicker-than-expected members are declining and
will be mostly phased out after next year.
Aetna shares, which had fallen 7 percent on Thursday, rose
4.1 percent to $103.97 on Friday. Anthem, the second-largest
player on the exchanges, was up 2.5 percent at $131.10 after
dropping 9 percent the previous day, and UnitedHealth gained 2.1
percent to $113.00 after a 6 percent decline.
Aetna said it still expected 2015 operating earnings of
$7.45 to $7.55 per share, and Anthem reiterated its outlook of
$9.53 to $9.63 per share.
Leerink Partners analyst Ana Gupte said Aetna's statement
showed the company had already factored in the individual
business' challenges to its forecasts. Aetna and Anthem had
referred back to earlier comments when asked on Thursday about
In October, Aetna had said it was not making money from the
business, which sells government-subsidized plans on exchanges
created under the U.S. Affordable Care Act but that
profitability could improve next year. It has about 815,000
members in plans on the exchanges.
Anthem said last month that 2016 would be a challenging year
on the exchanges, where it has about 824,000 customers, and that
the business would drag on profit.
The earnings affirmations echo that of Centene Corp
and Molina Healthcare Inc. The small health insurers,
which focus on Medicaid, also said its exchange business was
performing in line with its expectations.
Molina CEO J. Mario Molina said that Molina was targeting
low-income people, similar to its Medicaid patients, and that it
was not having the same problems as UnitedHealth.
Kaiser Permanente, a hospital and insurer system, also said
that it was "strongly committed" to the exchanges.
(Reporting by Caroline Humer in New York and Amrutha Penumudi
in Bengaluru; Editing by Savio D'Souza, Lisa Von Ahn and Diane