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Major for-profit insurers still unclear on PPACA fallout, but see opportunities
Executives at major for-profit health insurers disagree on how they expect employers to react to the implementation of health insurance exchanges under health reform, but they all see opportunities for growth. UnitedHealth Group Inc. President and CEO Stephen Hemsley summed up the general theme during insurer presentations at last week's annual Sanford C. Bernstein healthcare investor conference: "Our business is performing well today with increasing momentum. Our financial metrics are strong and consistent. When we look around the U.S. health economy, $2.6 trillion in size and expanding every year, we see opportunities to modernize and advance the healthcare system, opportunities to address cost and waste, and remarkable new opportunities to meet the challenges this new legislation will create."
The question for payers, like hospitals, is: Will smaller players find a way to tap into the opportunities as well or be forced out of the market because they don't have the sheer size necessary to create the required economies?
Despite all of the furor over the exchanges, UnitedHealth doesn't expect "really significant movement, nor would any of the CBO [Congressional Budget Office] models in the marketplace anticipate a movement with respect to a broad exodus from commercial benefits into the exchange versions," said Hemsley. However, Cigna Corp. President and CEO David Cordani has a slightly different view, expecting some employers to "indeed opt out" over the next five years, reports Dow Jones Newswires. "Exactly who opts out and why is yet to be determined," said Cordani
Officials at Cigna, Humana Inc. and Aetna all said that they are seeking acquisition opportunities. However, Aetna CEO Ronald Williams said the company could moderate its acquisition strategy depending on how healthcare reform regulations are eventually written, reports the Wall Street Journal.
These large insurers all painted a relatively rosy picture for investors. If the strong start to stomp out the week, I hope the government will hold true to its promise to block any mergers deemed "likely to reduce competition." - Caralyn
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