U.S. health insurer Aetna Inc on Friday said its business that includes individual Obamacare health plans had performed as expected, following on earlier news that UnitedHealth Group Inc might exit the unprofitable market.
Aetna said in a regulatory filing that its individual business had continued to perform in line with its projections through October. It backed its full-year 2015 operating earnings forecast of $7.45 to $7.55 per share.
The news came the day after UnitedHealth cut its earnings forecast, saying it was losing money on the Obamacare business because of low enrollment and high costs. The company said it might pull out of these plans in 2017.
That statement from the fourth-largest insurer on the exchange raised questions about the long-term sustainability of the key Obamacare program and drove down shares of insurers, including Aetna, and hospital companies.
Leerink Partners analyst Ana Gupte said Aetna’s statement showed the company had already factored in challenges in the individual business to its 2015 outlook and commentary about 2016. Aetna had referred back to earlier comments when asked on Thursday about UnitedHealth’s commentary.
In October, Aetna had said it was not making money from the business, which sells government-subsidized plans on exchanges created under the U.S. Affordable Care Act but that profitability could improve next year. It had about 815,000 members in plans on the exchanges and 275,000 in plans sold off the exchanges.
Enrollment for 2016 exchange plans opened earlier this month. In October, the U.S. Department of Health and Human Services forecast about 10 million people would have plans in 2016, significantly below industry expectations of 20 million.
On Thursday, Aetna shares fell 7 percent, UnitedHealth lost 6 percent and Anthem Inc, the second-largest player on the exchanges, fell 9 percent.
Aetna’s earnings affirmation echoes that of Centene Corp. The small health insurer, which focuses on Medicaid, also said its exchange business was performing in line with its expectations.
Kaiser Permanente, a hospital and insurer system that sells Obamacare plans in eight states and the District of Columbia, said in an emailed statement on Thursday that it was “strongly committed” to participating in the exchanges.
(Reporting by Caroline Humer in New York and Amrutha Penumudi in Bengaluru; Editing by Savio D’Souza and Lisa Von Ahn)
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