Aetna, Anthem reassure investors on Obamacare business

US 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 sector.

Minnetonka-based UnitedHealth Group said Thursday that it will scale back marketing for plans it sells on the exchanges and decide next year whether it will even stay in that business in 2017.

Just a month ago, UnitedHealth said that it was expecting substantial improvement for the Obamacare business in 2016. Anthem also said last month business on the exchanges was a challenge, according to the report.

UnitedHealth’s shares slumped 5.7 percent to $110.63 on Thursday.

In a Securities and Exchange Commission filing Friday, insurance giant Aetna (AET) confirmed that it expects to meet its full-year operating earnings targets, suggesting that the company is not absorbing the kinds of losses that UnitedHealth blamed for its reconsideration of Obamacare.

UnitedHealth also said that a few people are signing up for coverage, getting care, and then dropping their policies. And even if they do leave, she said, there are plenty of other insurers to pick up their market share.

Chief Financial Officer David Wichmann told analysts in October that the company expected its exchange business to be “strikingly better” in 2016 and that the exchanges will mature into a strong growth market.

Analysts said people who purchase insurance through the Affordable Care Act are typically sicker and cost more to treat. That drains a company’s profits. Enrollment in 2015 also fell short of initial goals, and insurers say that trend has made it hard to price their plans. Congress anticipated that, in the early years, insurers would struggle to anticipate their medical costs, and that as a result they would set premiums too low and thus lose money – exactly the problem that UnitedHealth is now reporting.

“This is further indication that statements from one issuer are not reflective of the marketplace’s overall strength going forward”, said Ben Wakana, spokesman for the Department of Health and Human Services. “While Colorado HealthOP can continue to pay claims for the rest of 2015, we cannot allow it to sell or renew policies on the exchange for 2016”.

The deadline to enroll is January 31, but members at Family First Health recommend you do it much sooner since it takes about 2-4 weeks to process. UnitedHealth boosted its Obamacare presence for 2016, expanding to 11 new markets.

The company plans to evaluate during the first half of next year whether it would continue to offer Obamacare plans in 2017.

That, many worry, could represent the tip of the iceberg for an industry still waiting to see if Obamacare, which aims to extend health care coverage to millions more Americans at cheaper rates, works as planned.

UnitedHealth Group said it would provide more detail on its outlook at its investor conference on December 1.

Insurance premiums on the exchanges have been rising substantially, making them less affordable for those who do not qualify for federal subsidies for their health insurance. The Obama administration is optimistic that the health care marketplace will stabilize. For many insurers, the balance between healthy and unhealthy customers has been tipped out of their favor, forcing them to raise their premiums to cover the cost of care.

The basis for the new regulations were that the government couldn’t prevent insurers from denying coverage on the basis of pre-existing conditions without also ensuring that healthy people had little choice but to buy coverage.