Things are good for the top three health insurers right now, at least financially speaking. Aetna, UnitedHealth and WellPoint all released third quarter reports that surpassed expectations and provided more evidence that the Affordable Care Act is generally good for business.
WellPoint announced its third quarter earnings on Wednesday, saying that it increased membership by 751,000 individuals who signed up through the health insurance exchanges and another 700,000 new Medicaid members. More importantly, it said those new members aren't as expensive to insure as anticipated, the Associated Press reported.
And Aetna said in its financial report published Tuesday that its exchange business has been marginally profitable so far.
"People are starting to understand that the 2015 landscape is a little less harrowing than 2014," Jennifer Lynch, an analyst who covers the industry for BMO Capital Markets, told the AP.
Based off its report, UnitedHealth CEO Stephen Hemsley thinks the company is better positioned now than it was at the beginning of 2014, and he expects growth across the board next year. And WellPoint CEO Joseph Swedish said the insurer expects 2015 earnings per share to surpass its forecast for this year, notes the AP. But Aetna CEO Mark Bertolini predicted it will be a "long way" before insurers start seeing healthy consumers enroll in the health insurance exchanges, FierceHealthPayer previously reported.
Meanwhile, another trend appeared in this quarter's reports--the small business market is shrinking, with more businesses shifting their employees to exchanges. WellPoint, for example, said its small-business membership is decreasing faster than it predicted, having lost about 300,000 members this year, the Wall Street Journal reported.
And Aetna Chief Financial Officer Shawn Guertin commented that the insurer saw "some erosion at the bottom of the market" among companies with fewer than 10 workers. Kaiser Permanente is seeing "some contraction" in the small-group market as well, said Joe Smith, the insurer's vice president for small business, according to the WSJ.
WellPoint's Chief Financial Officer Wayne DeVeydt believes that small companies will continue to consider exchanges as an option for providing health coverage to their employees. "We think [that] will become even probably a more prominent decision that they'll make this quarter," he said, the WSJ noted.