Aetna says individual federal health exchange business performing as expected

In addition, the insurer said it was contemplating exiting the Obamacare exchange market in 2017, raising concerns about the viability of the insurance exchanges, and sending the health insurance sector tumbling.

Anthem and Aetna have said they’ll be patient as the exchange business develops, and that they expect it to eventually become profitable. Insurers are still struggling to attract enough healthy patients, and the analyst said it’s too easy for customers to manipulate the system by doing things like signing up for coverage, using health care, and then stopping premium payments. The company says that it has sustained heavy losses in selling insurance on the Obamacare exchanges.

Expectations for future participation in the market have been reduced, he said, as cooperative insurers created to serve the exchange markets have failed. The company said it would expand into 11 more exchanges next year after growing from four to 24 in 2015.

UnitedHealth said it cut its profit forecast to account for $425 million in losses it expects for individual policies in 2015 and 2016.

“If they 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. Perhaps that’s why the nation’s biggest healthcare provider is seriously considering pulling out of ObamaCare, a move that would force more than a half million customers off their plans. “That’s the exact opposite outcome from what the president promised”, said Pipes.

The exchanges offered a potential growth boom to insurers, but also risk because UnitedHealth and others had little sense of the health needs of new customers.

The article suggests that because insurers have raised premiums for the most popular plans while also increasing out-of-pocket costs, healthy people are unlikely to head to the federal exchange.

“We’ve been very clear with the administration about the serious challenges facing consumers and health plans in this exchange market”, AHIP CEO Marilyn Tavenner said in an e-mailed statement.

UnitedHealth said it would decide whether to continue offering this coverage for 2017 by the middle of next year.

UnitedHealth was down 5.6 percent; Aetna, Anthem and Cigna were down 7.4, 6.7 and 5 percent, respectively.

UnitedHealth said it suspended marketing its individual exchange plans and is cutting or eliminating commissions for brokers who sell the coverage.

“As we’ve seen during the first two weeks of open enrollment, every day, tens of thousands more Americans turn to the health insurance marketplace for health coverage and even more return to the marketplace for another year”, said Aaron Albright, spokesman for the Centers for Medicare and Medicaid Services, which oversees Obamacare. UnitedHealth now expects 2015 earnings of about $6 per share, down from its previous forecast for $6.25 to $6.35 per share.

In 2014, the company said ACA “negatively impacted full year net earnings by $1 billion or approximately $1.00 per share”. Next year, earnings per share will be between $7.10 and $7.30, the first time it has given 2016 estimates.

Shares of the big health insurers all started tumbling Thursday before markets opened and after UnitedHealth delivered its update.