Leading health insurer won’t quit Obamacare; CEO plans for growth

The head of one of the country’s largest health insurers has recommitted the company to the individual insurance exchanges, unlike competitor UnitedHealth, and actually anticipates growth

Insurance News

By Lyle Adriano

While other insurers have declared their intent to pull out of the federal health insurance marketplace, one company is resolute in its plans to stay and expand.

Insurer Anthem just that Wednesday, and reassured policyholders that the company is set to grow further.

UnitedHealth Group, one of Anthem’s competitors, is anticipated to pull out of the Affordable Care Act (ACA) exchanges next year. The insurer cited losing too much money on its exchange customers. Other insurers, including startup co-op healthcare plans created by the reform law, have also reported losses.

Chief Executive Officer Joseph Swedish shared that Anthem saw more customers on the exchanges than it had anticipated this year—184,000 new members signed up to Anthem over the healthcare exchanges for the first quarter.  Executives of the company said that it was too early to estimate the costs of adding new members, but they feel confident that they would at the very least break even or hit small profit margins of 3 to 5%.

Swedish also brought up the company’s pending acquisition of Cigna Corp., which would help Anthem expand into more markets.

Despite its decision to stand and fight, Anthem admitted that the federal health insurance exchanges may not be profitable enough until after next year, should structural changes to the exchanges be made.

"We have positioned our portfolio to grow enrollment in the right markets with the right products in 2017," the CEO told investors in a conference call. "I think a sustainable market can be built."

The company revealed that it has been discussing with the government about changing the way customer risk is shared among insurers, the exceptions allowed for consumers attempting to enroll outside of the set periods, and the grace period for non-payment of insurance premiums and new insurance products, reported Reuters.

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