UNH UnitedHealth Group Inc

By Nathan Becker 

Health insurers Aetna Inc. and Anthem Inc. on Friday said their individual commercial businesses have performed within expectations lately, a day after UnitedHealth Group Inc. said it was considering exiting the Affordable Care Act's exchanges.

The statements could be a sign that big problems with business on government exchanges aren't widespread across insurers. On Thursday, UnitedHealth, the biggest health insurer in the U.S., said it has suffered deep losses on its exchange-related business.

That announcement stoked worries about the future of the health marketplaces that are at the center of the Obama administration's health law.

Aetna and Anthem also backed their profit outlooks for the year on Friday after UnitedHealth cut its view Thursday.

Still, the companies' exchange-related business isn't without troubles--Aetna said on an earnings call earlier this month that individual business for its public-exchange and consumer efforts remained challenging. It plans to participate on individual exchanges in 15 states next year, down from 17 states in 2015.

Chief Executive Mark Bertolini at the time said the 15 states made up "a footprint that we continue to believe can drive net membership growth."

Anthem said in October that its exchange membership declined in the latest quarter.

Anthem Chief Executive Joseph Swedish said the company "remains committed to enhancing access to high quality, affordable health care for all of our members inside and outside of the insurance exchanges and continuing our dialogue with policy makers and regulators regarding how we can improve the stability of the individual market."

Anthem operates in 14 exchange states.

UnitedHealth operated on individual exchanges in 23 states this year. The company has locked in its exchange offerings for 2016, but it is pulling back on marketing them during the current open-enrollment period to limit membership and considering exiting them in 2017.

Anthem and Aetna both have big merger deals on the table to be reviewed by the government--Anthem has an agreement in place to buy Cigna Corp., while Aetna Inc. has an agreement to buy Humana Inc. Those moves come as the biggest insurers seek cost efficiency and scale as the health-care landscape changes because of the Affordable Care Act and other factors.

Molina Healthcare Inc., which is seeing profits on its exchange business, also offered reassurance for investors nervous about the sector after UnitedHealth's comments. Chief Executive Mario Molina said the company wasn't seeing the issues UnitedHealth flagged. For instance, he said, around a quarter of Molina's exchange enrollees came in outside the annual open-enrollment period, but this group didn't appear to be running up a notably higher health-costs tab than others. "I don't think those patients are a whole lot different from those who come to us during open enrollment," he said.

UnitedHealth had said it was seeing higher costs among these enrollees, suggesting consumers might be purchasing plans to cover imminent medical expenses.

Dr. Molina also said he'd seen "no evidence at this point that there is adverse selection going on within our population," meaning that the enrollees aren't skewed toward older, sicker people who tend to need more health care. Molina has said it has around 226,000 exchange enrollees.

Analysts have said that companies like Molina, which focus largely on Medicaid, may have advantages that are helping them do better in the exchange environment. Those include generally lower-cost networks of providers, and a target population that is relatively low-income, and thus highly subsidized by the federal government.

Another publicly traded insurer, Centene Corp., also backed its outlook and said its marketplace business is performing as expected.

Ben Wakana, a spokesman for the Department of Health and Human Services, said the statements were an indication that the overall marketplace has strength going forward.

"It continues to grow, giving more Americans access to quality, affordable health care, and consumers are benefiting from increased choice and competition," Mr. Wakana said.

Anna Wilde Mathews contributed to this article

Write to Nathan Becker at nathan.becker@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

(END) Dow Jones Newswires

November 20, 2015 18:22 ET (23:22 GMT)

UnitedHealth (NYSE:UNH)
Historical Stock Chart
From Mar 2024 to Apr 2024

UnitedHealth (NYSE:UNH)
Historical Stock Chart
From Apr 2023 to Apr 2024