Chairman and CEO MarkBertolini struck a cautiously optimistic tone about the Affordable Care Actmarketplace, saying the insurer is aiming to break even on its public exchangebusiness in 2016.
The insurer'senrollment through the ACA exchanges during the first quarter grew higher thanexpected, with most of the growth concentrated in few markets, includingFlorida, Georgia and North Carolina, where the insurer has a good coststructure, executives said on an earnings call.
Asof March 31, the insurer had 1.2 million individual members, including 911,000who signed up for plans on ACA exchanges. Those numbers represented a jump of200,000 from year-end 2015 but a slight decline from a year ago, executivesnoted.
Demographicsof the insurer's ACA exchange members have not changed during the quarter.While the early indicators are encouraging, it is premature to "declarevictory" at this stage, Bertolini cautioned.
Whilethe current administration did some good work to improve the program in theshort term, bigger structural changes are needed "around productflexibility, rating flexibility and pooling" for the ACA marketplace tobecome sustainable in the long term, the CEO stressed.
"Cross-subsidizingthe premium level across the large swath of population does not work, and thereneeds to be multiple pools with specific products for each pool," he said.
Bertolinialso emphasized that "a legislative response" is essential for theimplementation of these structural reforms.
"Wesee this as a good investment, hoping that we have an administration and aCongress that will allow us to change the product like we change Medicare everyyear, and we change Medicaid every year. We have not been able to touch thisproduct because of the politics, but if we can get to that point, we believe weare in a very good place to make this a sustainable program," he said.