Dive Brief:
- Cigna CFO Tom McCarthy suggested during an investor conference last week the ACA marketplaces continue to hold promise for insurers despite the volatility and financial losses of these first years.
- McCarthy's sentiment stands in contrast to other C-suite executives at UnitedHealth, as well as potential merger partners Humana and Aetna, who have recently voiced concern about the exchanges or their continued participation.
- Although Cigna expects to continue to lose money in 2016, "That, to me, does not undermine the long-term attractiveness of the market," McCarthy was quoted by the Hartford Courant. "I do expect that over time, that market will evolve to be attractive for the industry generally, and for Cigna in particular."
Dive Insight:
McCarthy's viewpoint provides a counter-balance to other top insurance execs' recent negativity regarding the ACA exchanges. At the same time, it's worth noting Cigna has a relatively small stake in its ACA plan success, with only 204,000 individual customers (including its non-exchange individual customers.)
Cigna's optimism is perhaps most aligned with that of its slated buyer, Anthem, which saw a rougher than expected fourth quarter but roughly broke even for 2015. Anthem says it expects to make a profit on its ACA business for 2016. In addition, Anthem CEO Joseph Swedish has praised federal adjustments to limit special enrollment opportunities. However, like the other competitors, Swedish has hinted at uncertainty about Anthem's future marketplace participation, saying the company would have to "judge the sustainability of the exchange marketplace and how well we can engage in that marketplace going forward."
It may be Cigna's future participation is in Anthem's hands as its acquisition by the company remains pending.