The company said Thursday that it limited the damage for 2016 by setting relatively high prices for next year, even as it expanded into 11 more states. Aetna Inc. CEO Mark Bertolini told analysts last month that the nation’s third-largest insurer still sees the exchange business as a big opportunity and that it was “way too early to call it quits”.
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Shares of Aetna Inc. climbed 4 percent, or $4.06 to $104.01 in midday trading Friday, while Anthem Inc. stock was up more than 2 percent, or $2.83, to $130.67. That includes insurance sold on the exchanges, a key component in the ACA’s push to expand insurance coverage.
The company’s shares fell 5.6 percent to $110.63 at the close in NY.
“If [UnitedHealth] exited (the exchanges), it wouldn’t matter that much to the functioning of the ACA, but it would show why increasing enrollment is so important”, Levitt said.
Wakana added that federal health care exchanges are stable enough that there are an average of five providers offering coverage for every county in three dozen states.
More than half a million Americans are now enrolled in one of the plans that were established after Congress passed the Affordable Care Act in December 2009.
The news sent shockwaves through an already anxious healthcare marketplace, less than a month into this year’s open enrollment period for ObamaCare plans.
Tennesseans looking for low-priced health insurance under the Affordable Care Act may find fewer choices after 2016.
Another publicly traded insurer, Centene Corp., also backed its outlook and said its marketplace business is performing as expected.
UnitedHealth expects 2015 earnings of about $6 per share, down from its previous forecast for $6.25 to $6.35 per share. Nor has the law’s focus on premiums – without any regard to other costs to consumers, such as deductibles – worked out in the real world, i.e. outside the offices of the Obama administration’s central planners. 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.
The fact that UnitedHealth is exercising “seller’s remorse” and scaling back its marketing for 2016 individual exchange products “takes it a little bit beyond just rhetoric and puts a little bit of teeth to this”, according to Hempstead. During the analysts’ conference call, he said that the company could not subsidize a marketplace where it does not see any opportunity of sustaining itself. Covered California, the state’s individual plan exchange, limited UnitedHealth to selling 2016 in a few smaller markets, as my colleague Chad Terhune reported, because the company left the state’s individual market in 2013 and spurned the launch of the exchange. He also said the company’s forecast for 2016 earnings ranging from $7.10 to $7.30 per share would have been higher.
UnitedHealth Group Inc (NYSE:UNH) might be pulling out from Obamacare.
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Insurers had criticized the exchanges before they opened, due to technology problems tied to the federal government-run HealthCare.gov website and concerns about the cost of covering customers who might be sicker than the general population. “Some 550,000 people are enrolled in the insurer’s exchange plans”.
