STOCK MARKET WATCH -- Monday, 23 November 2015

[Demeter]

7. Obamacare's Fate May Rest on Patience of Insurers Aetna, Anthem

JUST PUT THIS ABOMINATION OUT OF OUR MISERY, ALREADY!

http://www.bloomberg.com/news/articles/2015-11-20/obamacare-s-fate-may-rest-on-patience-of-insurers-aetna-anthem

The fate of Barack Obama’s signature health-care law may depend on how long Anthem Inc. and Aetna Inc. are willing to wait before starting to make money off it.

The two insurers are on the hot seat now that UnitedHealth Group Inc. appears unlikely to linger as a seller on the Affordable Care Act’s government-run markets. UnitedHealth, the U.S.’s largest health insurer, said Thursday that if it can’t turn a profit, in 2017 it may quit the health plan marketplaces where millions of Americans buy coverage. While UnitedHealth has a small share of that market, Anthem and Aetna are two of the biggest players. Like UnitedHealth, neither has had financial success there -- Aetna has said it’s losing money, while Anthem is making less than it would like. They’re both working to widen profit margins and have said their strategy is based on the expectation that covering people under the law will become more profitable.

“It looks like it’s more of a United issue, with some flavoring of national issues,” Bill Melville, an analyst who focuses on health insurance exchanges at Decision Resources Group, said by phone. “It’s a wake-up call that there’s been some pretty rough headwinds.”

Worrying Signs

There have been other worrying signs. Already 12 of the 23 nonprofit exchanges created to sell insurance under the Affordable Care Act have said they’re closing down, overwhelmed by financial losses. So far, though, Anthem and Aetna are holding steady in the market. Both companies said Friday they hadn’t seen any deterioration in their individual businesses through the end of October. That helped their shares recover some ground after a rout the previous day. Aetna rose 4.4 percent to $104.28 at 2:08 p.m. in New York, and Anthem climbed 2.5 percent to $131.10. UnitedHealth also rebounded, gaining 2.4 percent to $113.24.

“Anthem remains committed to enhancing access to high quality, affordable health care for all of our members inside and outside of the insurance exchanges,” Joseph Swedish, Anthem’s chief executive officer, said in a statement Friday. Anthem is “continuing our dialogue with policymakers and regulators regarding how we can improve the stability of the individual market,” he said.

Peter Costa, an analyst at Wells Fargo & Co., said Thursday that he expects Anthem and Aetna to lose money on the exchanges next year, potentially leading them to reconsider their postures.

“We believe UnitedHealth’s commentary that it would only participate in this market in 2017 if it expected to at least break even for the year is indicative of the mindset of many insurers,” Costa said. “We expect that the experience of insurers will either improve in 2017 and beyond, or they will choose to no longer participate in the market.”

WHAT IF THEY OPENED A MARKET, AND NOBODY PARTICIPATED?