(Reuters)—Anthem Inc. said it may leave more individual Obamacare markets due to uncertainty about the potential repeal of the healthcare law and subsidies that make the plans affordable for millions of Americans.
Republicans on Tuesday began a second day of debate on the U.S. Senate floor of a bill that would end Obamacare, but the effort to roll back Democratic President Barack Obama’s signature healthcare law faced significant hurdles.
The No. 2 U.S. health insurer has pressed lawmakers and government officials to continue funding the Obamacare program during a transition period and pay billions of dollars in medical care subsidies. U.S. President Donald Trump has threatened to cut off these payments.
Anthem, which sells Blue Cross Blue Shield plans in 14 states, has mostly pulled out of 3 states including Indiana where it had planned to sell 2018 plans in the individual market.
The insurer has more than a million customers in Obamacare individual plans.
In many states, Anthem has asked for rate increases of more than 20 percent in 2018 to cover high medical costs of members.
Without the government subsidies, it said it would need to raise rates another 20 percent, making the plans so pricey that they would only attract sick people. That would make profits elusive and raise premium prices further.
“There’s a cascading effect,” Chief Executive Joe Swedish said during a conference call to discuss the company’s second-quarter earnings.
Anthem has advocated for continued government subsidies to make insurance affordable, rules that keep a balanced pool of healthy and sick customers and discourage enrollment abuse as well as the elimination of insurance taxes.
“We do believe that we have been heard,” Swedish said.
Net Income Rises
Anthem, which scrapped its $54 billion deal to buy Cigna Corp in May, said net income rose to $855.3 million, or $3.16 per share in the second quarter, from $780.6 million, or $2.91 per share, a year earlier.
Excluding items, the company earned $3.37 per share, beating analysts’ average estimate of $3.23, according to Thomson Reuters I/B/E/S.
Anthem, which sells plans to employers as well as government-sponsored health insurance, said it now expects full-year adjusted profit to be greater than $11.70 per share, up from a previous forecast of at least $11.60.
That improved outlook was still below 2017 earnings of $11.78 per share expected by analysts.
Anthem shares fell $4.08, or 2.1 percent, to $186.50.