Health insurer Humana Inc. plans to exit all Obamacare marketplaces for 2018, another blow to the government health law that’s already facing the threat of repeal or significant alteration by Republicans and President Donald Trump.
Trump chimed in on Twitter after Humana announced its plan Tuesday afternoon. “Obamacare continues to fail. Humana to pull out in 2018. Will repeal, replace & save healthcare for ALL,” Trump said in a tweet.
Humana’s announcement came as the insurer laid out a new strategic plan following the dissolution earlier in the day of its $37 billion takeover by Aetna Inc. Humana sees losing $45 million on Affordable Care Act plans, Chief Executive Officer Bruce Broussard said on a conference call with investors and analysts.
Trump and Republicans in Congress have promised to do away with the ACA and replace it with a better program. Democrats and some health-care industry leaders contend that the replacement should be ready to implement when the ACA is repealed, and that no such plan is yet visible.
The company said it had about 204,000 members in individual health insurance plans in January, including 152,000 customers in Obamacare-compliant health plans. That’s down from 654,800 in all individual plans on Dec. 31, after Humana exited some states and scaled back its footprint in others.
The insurer said in July that it was reducing its presence in the individual market for 2017. At the time, the company said it was halting almost all sales of individual health insurance off of Obamacare’s exchanges. Humana said that for 2017 it would offer individual plans in about 156 counties in 11 states, down from 1,351 counties in 19 states a year earlier.
Humana announced its move out of Obamacare as Broussard sets the strategy for his Louisville, Kentucky-based firm to go it alone after its merger with Aetna was blocked in court. Since striking the deal, Humana has pulled back from the Affordable Care Act’s individual market, pressuring growth. The company is also working to improve its main business, Medicare Advantage plans, after a slump in government “star” ratings of products’ value that could weigh on profits.
Adjusted profit for 2017 will be $10.80 to $11 a share, Humana said in a statement. That’s toward the higher end of analysts’ estimates, which average $10.81 a share. The company authorized share buybacks of $1.5 billion for the first quarter of 2017 and $500 million for the rest of the year. The company said it has authorized share buybacks this year worth as much as $2 billion.
Aetna and Humana agreed to give up on their merger after a federal judge blocked it on Jan. 23. The judge sided with Justice Department lawyers who said that allowing the insurers to combine would harm competition, mainly in the market for Medicare Advantage plans.
Since agreeing to be acquired, Humana hasn’t been holding the customary quarterly calls when it reports results, though the company has said it held private meetings with investors. Broussard also said that the company would like to divest its long term care business.
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