Aetna Inc. Chairman and CEO Mark Bertolini wants to see "a significant shift" in healthcare policy, saying the Affordable Care Act failed to bring down insurance costs and improve access to customers.
Speaking during an earnings call, Bertolini said that insurance companies, including Aetna, "have collectively lost billions of dollars" on plans sold on health exchanges, and many players decided to either shrink their presence or completely pull out of the Affordable Care Act market.
"As the public exchanges enter their fourth year, it is clear that in the absence of a significant shift in regulatory policy, the risk pools for the ACA-compliant individual commercial products will continue to deteriorate," Bertolini said.
The executive, however, expressed optimism about "the next wave of healthcare reform" and added that the company will engage in talks with lawmakers and regulators to keep "the positive aspects of the ACA."
Aetna's own performance in the Affordable Care Act marketplace in 2016 was worse than expected, Bertolini said, as pretax operating losses from selling individual commercial products reached $450 million. The insurer hopes to cut its losses in 2017 by shrinking its exchange-related footprint, projecting individual membership to decline to 240,000 in the first quarter of 2017 from 965,000 members at the end of 2016.
The insurer already pulled out of several states for 2017, and it has no plans to re-enter those markets in 2018 as the new administration is working to repeal and replace the current healthcare law.
"We'd have to have markets worked up, prices worked up for April 2017, in order to apply, and there is no possible way we will be prepared to do that, given the unclear nature of where regulation is headed," the executive explained.
The company's 2017 outlook is boosted by lower levels of ACA-related losses, suspension of a health insurer fee and continued growth in individual Medicare Advantage products. It expects operating EPS for 2017 to be at least $8.55.
The S&P Capital IQ consensus normalized EPS estimate for 2017 is $8.75.
Aetna expects to end the first quarter with a medical membership of 22.2 million to 22.3 million, driven by growth in its Medicare products of approximately 120,000 members, and commercial administrative services contract members of between 75,000 and 100,000 members.
The company projects 2017 operating revenue to be in the range of $60 billion to $61 billion.