Noting the current regulatory uncertainty in the individual markets, Anthem’s chief executive said Wednesday that the insurer still has not yet decided whether and how much it will participate in the exchanges in 2018.
However, if the outlook doesn’t get clearer soon, Anthem will have to consider exiting, CEO Joseph Swedish said on the company’s fourth-quarter earnings call with analysts, echoing remarks he made during the company's third-quarter earnings call.
“If we can’t see stability going into ‘18 with respect to ether pricing, product or overall rules of engagement, we will be making some very conscious decisions with regard to extracting ourselves,” he said.
Factoring into Anthem’s decision will be whether policymakers and regulators implement several policy changes it has recommended to ensure both risk pool integrity and plan affordability, Swedish said.
These include repealing the health insurance tax; extending transitional or ”grandmothered” plans indefinitely; decreasing the number of special enrollment periods and strengthening eligibility verification; preventing third parties with a “financial interest” from steering individuals to ACA-compliant plans; and changing benefit and payment parameters to balance incentives for both healthy and sicker consumers to sign up for plans.
While it is clear that “the individual market under the ACA is not working well,” Swedish noted, Anthem also hopes for a “smooth transition that helps prevent health insurance disruptions for Americans whenever possible."
In 2017, the company expects its ACA-compliant individual plans to either break even or be slightly profitable, he said, mainly due to the price increases it implemented this year.
Overall in the fourth quarter, Anthem reported an adjusted net income of $1.76 per share, and its full-year adjusted net income was $11 per share. Its medical enrollment has increased by 3.4% in 2016, totaling approximately 39.9 million members as of Dec. 31.
Anthem expects decision soon in antitrust case
Though a federal judge’s decision in the case challenging Anthem’s acquisition of Cigna was expected at the end of January, Swedish said he’s not concerned about the fact that a ruling hasn’t yet arrived given the complexity of the case.
In addition, he said he's “very confident” that a ruling will be coming soon.