Aetna (AET) said its individual commercial health insurance offerings under the Affordable Care Act “remained unprofitable in 2015,” but growth from other government lines of business helped boost overall company profits nearly 40 percent in the fourth quarter.
That means it’s working? Well, no — as you’ll see in the next two grafs:
Like its large rivals Anthem (ANTM) and UnitedHealth Group (UNH), Aetna said the medical costs of those Americans buying individual policies under the health law are difficult to manage. Insurers aren’t able to cover the costs of sick patients buying Obamacare policies with existing premium dollars and not enough healthy Americans are signing up.
Aetna chairman Mark Bertolini said he remains concerned about the “overall stability” of the risk pools. “We do not expect material growth in this business,” Bertolini told analysts on a 50-minute conference call this morning. [Emphasis added]
I assume what Bertolini means there is that either signups up on the exchanges have plateaued, or that revenues have. Either way indicates that the Healthcare.gov and the various state exchanges are dismal failures, subject to rising premiums & ever-narrower coverage networks. That of course is the best case scenario, assuming the exchanges can avoid entering a death spiral.
But don’t worry about Aetna’s financial situation — they’re doing great doling out Medicaid benefits:
The company added nearly 70,000 Medicaid enrollees in the fourth quarter thanks in part to more states expanding the program with the help of federal dollars available under the Affordable Care Act. The company now has more than 1.5 million Americans in its Medicaid plans.
By next year, Aetna is expected to be an even bigger player in the Medicare and Medicaid businesses should the Justice Department sign off on its $37 billion acquisition of Humana (HUM).
Private coverage gets worse and worse, while the gravy train keeps rolling along for welfare recipients — individuals and crony corporatists.