Anthem, Aetna CEOs strike positive chord at JP Morgan Healthcare Conference
Though recent financial news for health insurers has been less than upbeat, the CEOs of Anthem and Aetna were optimistic about their 2016 outlook and even the individual market during presentations at the JP Morgan Healthcare Conference Tuesday in San Francisco.
Anthem, which still plans to complete its acquisition of Cigna later this year, projects its 2016 adjusted earnings per share to be greater than $10.80, CEO Joseph Swedish said. That's a notable increase from the $10.16 per share it projected for 2015, the Wall Street Journal notes, and hews close to what analysts predicted.
The insurer also expected its 2015 membership to reach 38.6 million at end of 2015, a growth of nearly 3 percent that "creates a favorable starting point for 2016 enrollment," Swedish said.
Nevertheless, the company still expects "volume pressure" in its individual business, Swedish said, adding that Anthem hopes to see some margin improvement in 2016, but still does not expect to reach its long-term target margins in that sector.
Losses in the individual market led UnitedHealth to revise its earnings outlook in late November and threaten to pull out of the Affordable Care Act exchanges, and Humana said this week in a Securities and Exchange Commission filing that it expects financial and membership losses tied to its ACA plans.
"We believe we have an obligation to stick it out, and work with it until we know it that won't work, and I believe it is too early to give up on this process," he said. Individual business accounts for only 5 percent of Aetna's total membership and 6 percent of its total operating revenue, meaning "from a tactical standpoint, this is not breaking the bank one way or the other," Bertolini added. "So it's not time to give up."
Bertolini also reiterated that he expects Aetna's merger with Humana to close this year. The company expects regulators to complete their document requests in the next month, then discuss potential divestitures with Aetna.
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