Anthem Inc. may slash participation in theindividual major medical insurance market in 2018.

Joseph Swedish, the chairman of the Indianapolis-based healthinsurer, said today that the company will think hard about how itwants to participate in the individual market "toward the end ofthe first half." The first half of the year ends June 30.

Swedish talked about the company's individual health unit duringa conference call with securities analysts. The call was organizedto discuss fourth-quarter earnings.

Anthem has been a major supporter of the Affordable Care Act public exchange system, andSwedish is now the president of Washington-based America's HealthInsurance Plans. AHIP is a major health insurer trade group.

Swedish said Anthem wants to see how insuranceregulators, members of Congress and other policymakers respond toits requests for efforts to stabilize the individual market.

Anthem will look to see how policymakers are making the neededchanges "as we approach the end of the first half of this year,"Swedish said. "We will have to make decisions on whether or not wewill surgically extract ourselves from certain rating regions, or,quite frankly, even on a larger scale."

Anthem simply wants to achieve a modest level of profitabilityon its individual business this year, Swedish said.

"But, if we can't see stability going into 2018, with respect tothe pricing, the products or the overall rules of engagement, thenwe will begin making some very conscious decisions with respect toextracting ourselves," Swedish said.

Swedish added: "While the direction in Washington has beenpositive, we still need certainty about short-term fixes in orderto determine the extent of our participation in the individualmarket in 2018."

Anthem is also evaluating how it will participate in the ACApublic exchange system, Swedish said. The exchange system serves alarge fraction of individual coverage holders and a smallpercentage of the small-group market.

Swedish said he sees some signs that stabilization couldoccur.

How Anthem did

Anthem as a whole is reporting $368 million in net income forthe fourth quarter on $22 billion in revenue, up from $181 millionin net income on $20 billion in revenue for the fourth quarter of2015.

The company ended the year providing or administering healthcoverage for 40 million people, or 3.4 percent more than it wascovering a year earlier.

Medicare plan enrollment fell 0.1 percent, to 1.4million.

Medicaid plan enrollment rose 10 percent, to 6.5 million.

National group enrollment rose 4.1 percent, to 13 million, andlocal group enrollment rose 1.2 percent, to 15 million.

The number of people covered by individual policies fell 0.7percent, to 1.7 million.

Efforts to cut costs helped improve the profitability of mostlines, but an increase in medical cost experience hurt theperformance of the individual coverage unit, the company says.

About 80 percent of the company's individual coverage holdershave policies that comply fully with the Affordable Care Act rulesthat took effect in January 2014, and the rest have older, pre-ACApolicies, Swedish said.

The mix of 2017 ACA public exchange planenrollees looks about like what the company had expected,according to John Gallina, Anthem's chief financial officer.Gallina said one challenge that Anthem saw in the fourthquarter was higher-than-expected costs for enrollees with chronichealth problems.