Major insurers stand by Obamacare

Aetna said that its individual insurance business, including the plans created by the Affordable Care Act, performed within expectations through last month, Reuters reports. Officials said the plans in its individual market are costing more for health care, taxes and expenses than customers pay in premiums and that the plans are losing millions of dollars.

CEO Stephen Hemsley told investors Thursday that the company doesn’t intend to take further losses in 2017.

“The reality is we continue to see more people signing up for health insurance and more issuers entering the marketplaces”, Ben Wakana, a spokesman for the Department of Health and Human Services, said in an e-mail.

The company also stated that it’s not making money, but profitability is expected to improve next year. Although it is not pulling out of the marketplaces right away, the company becomes the first major insurer to suggest that it might leave them, raising questions about the stability of the insurance marketplaces into the future.

He also said that in recent weeks, growth expectations for individual exchange participation tempered the industry.

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.

However, the nation’s largest insurance company opting out of Obamacare would be a significant blow to President Obama’s signature policy achievement and could indicate that the exchange is not as viable an enterprise as once thought, Sheryl Skolnick, an analyst at Mizuho Securities, told Bloomberg.

“In the early stages of any marketplace, companies are figuring it out and there are winners and there are losers, and United is signaling, ‘Hey, we are one of those who lost, ‘” she said.

“I think the (ACA) marketplace is going to be around for a while”, said Molina CEO Dr. Mario Molina.

University of Minnesota Health Policy and Management Professor Jean Abraham says UnitedHealth’s frank assessment of doing business on public exchanges will attract policy makers’ attention. The article warns that health insurers need more Americans to come into the public exchanges to make it worth participating in financially.

UnitedHealth said it expects as much as $500 million in losses on the health plans in 2016. Anthem Inc. and Aetna Inc., the two biggest health insurers after UnitedHealth, also declined, as did hospital stocks including HCA Holdings Inc. and Community Health Systems Inc.

UnitedHealth, one of the nation’s biggest insurers, said it remains a strong supporter of sustainable efforts to ensure access to affordable, quality care and has advocated for this publicly for more than 20 years, including as one of the first businesses to focus on serving people through managed Medicaid and Medicare. However, that may change in a few years as the financial penalties of not having health insurance coverage get steeper.

Its estimated operating losses due to the exchanges amount to $700 million. UnitedHealth’s core business is selling employer-sponsored health plans, and it hasn’t been known for its familiarity with or success in the individual market. On Thursday, the company said it expected these plans to hurt current-quarter profit by $425 million, or 26 cents per share.