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Obamacare Insurers Sink

Boston Herald

By Lindsay Kalter

Analysts are sounding alarm bells on the long-term viability of Obamacare as the stock prices for health insurers are declining and major players continue to pull out of exchanges.

“If plans continue to lose money it’s certainly possible that more could threaten to pull out,” said Michael Newshel, a health care research analyst based in New York. “It could prompt the new administration to do something to fix and stabilize it.”

Insurers including Blue Cross, United Healthcare, Cigna, Humana — which last month said it will limit its participation to a handful of areas — have seen a gradual decline in stock prices, according to Texas-based conservative think tank Institute for Policy Innovation.

Cigna’s stock peaked at $168.06 in June 2015 and has dropped as low as $132, while Humana’s stock is at $178, down from almost $215.

UnitedHealth Group said in April it will pull out of marketplaces in most states.

One of the nation’s largest private insurers, Aetna, announced last week it would drop out of the exchanges in 11 of the 15 states where it offers plans.

The insurer lost $430 million on the Obamacare plans in the first half of the year.

Its stock peaked at $132.50 on June 25, 2015, and it is now trading at about $120.

The company said it will sell individual policies in 242 counties spanning four states. The insurer started the year in 778 counties across 15 states.

“We will continue to evaluate our participation in individual public exchanges while gaining additional insight from the counties where we will maintain our presence, and may expand our footprint in the future should there be meaningful exchange-related policy improvements,” Aetna CEO Mark Bertolini said in a statement last week.

Newshel said if rate hikes do not drive away participants, things could stabilize by next year. But, he said, eyes should be on the large insurers in the next few weeks to see if others follow suit.

But he and Massachusetts insurers say the Bay State could weather the storm, given its head-start on health care reform.

“Since the uninsured rate was already so low, the risk pool in the Massachusetts individual market is likely better balanced than the nation at large,” he said.

In addition, the Massachusetts-based health plans are not shareholder-owned, said Jay McQuaide, spokesman for Blue Cross.

“Some of the issues that are playing out in the rest of the country have already played out in Massachusetts,” he said. “We have a strong tradition to offer products on our exchange.”