Retreating carriers whine that exchanges bruised their bottom lines; meanwhile, their profits are off the charts, thanks to … Obamacare.
You might be thinking, based on what insurance company CEOs have been saying over the past few weeks, that carriers are awash in red ink because of Obamacare and would surely go bust if they had to keep paying the medical claims of their Obamacare customers for even one more year. You might even be shedding a tear or two for their poor shareholders.
Here, for example, is the grim news Aetna’s CEO, Mark Bertolini, delivered to Wall Street financial analysts a few days ago:
In light of a second-quarter pretax loss of $200 million and total pretax losses of more than $430 million since January 2014 in our individual products, we have decided to reduce our individual public exchange presence in 2017, which will limit our financial exposure.
This despite the fact that since January 2014, the date Bertolini mentioned above, Aetna has reported operating profits of $6.7 billion. That’s right. Even though Bertolini said Aetna hasn’t yet turned a profit on its Obamacare business, overall it has pocketed nearly $7 billion.
So even though Aetna is still hugely profitable, it will stop offering coverage in most Obamacare markets because its bean counters recently noticed what Bertolini described as a spike in “individuals in need of high-cost care.’
This is an abstract of an article Wendell first published on healthinsurance.org. The full text is available here.