In separate news, Aetna has said to re-evaluate the sale of its health care plans under President Obama’s Affordable Care Act (ACA), following the product’s weak performance on individual exchanges and uncertainty about its future performance.
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Obamacare may soon be in critical condition.
The company also said it meant to discontinue almost all off-exchange individual commercial plans in 2017.
The U.S. health insurer, whose acquisition by rival Aetna Inc has been challenged by U.S. antitrust authorities, said it planned to shrink its individual commercial business to 156 counties next year from 1,351 now. Operating revenue rose 5% to $15.9 billion, surpassing estimates for $15.69 billion. “We believe it is only prudent to reassess our level of participation on the public exchanges”, Mark Bertolini, Aetna chairman and CEO, said in a conference call with analysts on Thursday.
What the insurers are implying here is that if the Obamacare marketplace doesn’t “stabilize” to their satisfaction (even though the companies will still be making money hand over fist) they’ll threaten to take their marbles and go home.
Just this spring, UnitedHealthcare, the nation’s largest (and most profitable) insurer, which now sells Obamacare coverage in 34 states, announced that it planned to exit all but a “handful” of those states. Why?
Still, Marjorie Connolly, a spokeswoman for the Department of Health & Human Services, said consumers will have “a robust set of choices”, when they pick ACA plans for next year.
Aetna and Humana said they would sell assets representing of 291,000 Medicare Advantage enrollees in 21 states to Molina, mainly a Medicaid insurer.
Regardless of this news, the Wall Street Journal stated that Aetna released “better-than-expected profit and revenue growth” in its second quarter 2016 financial results. Two massive mergers have been attempted, with Anthem ANTX looking to purchase Cigna CI for $54 billion and Aetna attempting to buy Humana HUM for $37 billion. Humana and UnitedHealth will no longer sell exchange plans in the state next year, leaving only Blue Cross and Blue Shield of Alabama. But Aetna says the business lost roughly $200 million in the second quarter and expects a loss of more than $300 million for the full year.
The latest federal statistics show that more than 11 million people are taking part in Obamacare this year.
The regulator said it was concerned the deal could hurt competition in the state’s market for commercial health insurance coverage. Diluted earnings per common share, at $2.06, were down 28 percent.
Aetna was planning to expand to a few states like New Jersey and IN for 2017.
Molina Healthcare, Inc. (NYSE:MOH) today announced that it has entered into definitive agreements to acquire certain Medicare Advantage assets from both Aetna Inc.
Aetna shares have risen nearly 6 percent since the beginning of the year, while the Standard & Poor’s 500 index has risen 6 percent.
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Aetna and Humana officials said in a joint statement that the agreements to sell the Medicare Advantage plans to Molina Healthcare promote competition within the highly regulated Medicare industry and address the Justice Department’s concerns. The Hartford, Connecticut, insurer said Tuesday that its profit grew 9 percent to $790.8 million.
