(Reuters) - Health insurer Cigna Corp on Thursday added to growing public pressure on Republican lawmakers and the Trump administration to stabilize the Obamacare individual market or risk insurers pulling out.
Cigna Chief Executive Officer David Cordani described the three-year-old market as “fragile at best,” echoing concerns of top executives at Aetna Inc and Anthem Corp who said earlier this week they need tighter enrollment rules and requirements to create a better balance of healthy and sick customers.
Cigna shares fell 1.2 percent to $145.86.
Republicans and President Donald Trump have promised not to pull the rug out from under Americans who were newly insured under President Barack Obama’s healthcare reform law, even as they seek to “repeal and replace” the law as soon as possible.
Lawmakers have not agreed on a plan for new individual products that would replace the Obamacare coverage, although some have started to talk about a rescue package that could fix the market.
If insurers drop out, that would lead to less competition and probably more premium rate increases in 2018. Premiums rose about 25 percent in 2017. The Affordable Care Act, or Obamacare, has not delivered its promise, Aetna CEO Mark Bertolini said earlier this week.
“The health insurance industry is really tight with Republicans and have a lot of influence on what’s going on,” Leerink Partners analyst Ana Gupte said.
“They are saying we won’t participate in 2018 if you don’t do this, this and that, but it’s a negotiation and the GOP is going to be very receptive to what they want. The last thing they need is a big disruption in the market.”
The various parties face a tight timetable. Cordani and other insurer CEOs need to decide in the next few months if they are going to prepare plans to submit to regulators before the April and May deadlines for 2018 plans.
Cigna, which offers plans in seven states, will “fully assess whether we will participate, where, and how,” Cordani told investors during a conference call to discuss its better-than-expected fourth-quarter earnings.
Cigna, which manages large corporate and government health plans and has a small individual insurance business, said it is waiting for a ruling on the U.S. government’s lawsuit to block its acquisition by Anthem. It declined to answer analysts’ questions about its capital deployment plans such as buybacks.
Individual insurance created by former President Barack Obama’s health reform law has been a difficult business for large insurers. Cordani said the company has lost money each of the last three years, and expects to lose money this year, though less than in 2016.
Reporting by Caroline Humer in New York; Additional reporting by Ankur Banerjee in Bengaluru; Editing by Martina D'Couto and Jeffrey Benkoe