Insurer Aetna sees Obamacare changes ahead; no word on Humana
By Caroline Humer and Ankur Banerjee
(Reuters) - Health insurer Aetna Inc (AET.N: Quote) said on Tuesday it lost more money than expected on the Obamacare individual insurance plans, one of the main pillars of the Affordable Care Act that President Donald Trump is working to "repeal and replace."
Aetna Chief Executive Officer Mark Bertolini also predicted years of transition in that individual insurance business but said it presents opportunities as new products are developed that appeal to younger and healthier people.
Bertolini said the company is weighing how to proceed after a federal court ruled last week against its $34 billion deal for Humana Inc (HUM.N: Quote) on antitrust grounds. He said Aetna, the No. 3 U.S. health insurer, may decide to appeal or there could be a deal extension, which it will announce before the current Humana agreement's end date of Feb. 15.
Aetna, along with UnitedHealth Group Inc (UNH.N: Quote), has largely exited the individual business for 2017, but has remained on exchanges in four states. It has 240,000 customers in individual plans and said it expects to post a loss again this year on the business.
Bertolini said in an interview that the Hartford, Connecticut, company will not enter any new markets with exchange Obamacare plans in 2018, and will decide in the next few months if it will re-enter Delaware, Iowa, Nebraska and Virginia, where it now sells these plans.
Like many insurers, he said Aetna feels structural changes are needed to account for the higher medical costs of participants in the Obamacare exchange market for individuals. He said the company is talking to lawmakers and regulators about how to make these changes as Trump and Republicans consider new legislation and rules.
Aetna said it lost $450 million on the Obamacare business in 2016, including $100 million more than expected during the fourth quarter. The company expects lower losses in 2017.