Search Here

Its profits have fallen powerfully in the last quarter of 2015, said U.S. health insurer Humana Inc. on Wednesday. There have been unexpected and unforeseen costs and falling profits related to customers signing up for President Barack Obama's Affordable Care Act. The company is assessing whether or not it would need to withdraw in a couple of years.

The Kentucky-based insurance company will be taken over by rival Aetna later this year. Its net income of $101 million in that quarter of 2015 was down from $145 million in the earlier year, said Forbes.

The company had set aside $176 million reserve for losses expected from customers enrolling in health insurance plans.

"The benefit ratio associated with many of the company's individual commercial products, in particular ACA-compliant offerings, significantly exceeded its pricing expectations. The company continues to evaluate its participation in the individual commercial business for 2017," Humana said in its earnings statement. ACA-compliant offerings, significantly exceeded its pricing expectations. The company continues to evaluate its participation in the individual commercial business for 2017," Humana said in its earnings statement.

"Similar to other companies' reported results across the sector, Humana's operating results for this business were challenged in (fiscal 2015) primarily due to unanticipated modifications in the program subsequent to the passing of the Affordable Care Act, resulting in higher covered population morbidity and the ensuing enrollment and claims issues causing volatility in claims experience."

High losses have been reported by Humana, UnitedHealthcare, Aetna, Cigna and Anthem, with premiums paid by Obamacare customers as well as government subsidies have not been able to offset the expenses of a huge number of sick patients. Many of these could not afford health care and did not have the insurance because of earlier conditions, according to The Washington Examiner.

The largest insurer, UnitedHealthcare, explained in November that it would be dropping out of the marketplace in 2017. "We cannot sustain these losses," UnitedHealthcare CEO Stephen Hemsley said. "We can't really subsidize a marketplace that doesn't appear at the moment to be sustaining itself."

Aetna's chairman and CEO Mark Bertolini agreed, though the company is not planning to quit at present. "We continue to have serious concerns about the sustainability of the public exchanges," Chief Executive Officer Mark Bertolini said. "We remain concerned about the overall stability of the risk pool," he added.