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BUSINESSMonday 23 November 2015
Insurers reassure investors about ACA exchange business Ford workers
TOM MURPHY Shares of Molina and other their commitment have to the business and “con- approve new
AP Business Writer insurers plunged Thursday had some growing pains. tinuing our dialogue with
Health insurers rallied Fri- after UnitedHealth Group Aetna said last month that policymakers and regula- UAW contract
day to ease investor and cut its 2015 forecast, re- it lost money last year on tors regarding how we can
customer concerns about ported deep losses from the business, and it’s in the improve the stability of the DEE DURBIN
the Affordable Care Act’s its exchange business and red this year as well. individual market.” AP Auto Writer
The not-for-profit insurer DETROIT (AP) — Ford work-
This photo shows the Anthem logo at the company’s corporate headquarters in Indianapolis. Kaiser Permanente also ers narrowly approved a
said late Thursday that it new four-year contract,
Aetna Inc. and the Blue Cross-Blue Shield carrier Anthem Inc. each reaffirmed on Friday, Nov. remained “strongly com- wrapping up five months of
mitted” to participating in negotiations between the
20, 2015 their 2015 earnings forecasts. (AP Photo/Darron Cummings) the exchanges. Kaiser cov- United Auto Workers union
ers about 450,000 people and Detroit automakers.
public insurance exchang- said it will decide next year But the insurer expects in nine exchanges, and a The UAW said this week-
es a day after the nation’s whether it wants to con- improvement, in part be- spokeswoman said they end that Ford’s contract
biggest insurer questioned tinue in that market. That cause it is learning more are confident that the busi- passed with a 51.4-percent
its future in that still-devel- followed reports earlier this about the customers it ness is financially stable. vote. The agreement cov-
oping market. fall that several smaller, serves through this busi- Molina said his company ers 53,000 U.S. hourly work-
Blue Cross-Blue Shield insur- nonprofit insurance coop- ness. That will help it set the has been helped in the ers at 22 plants.
er Anthem and Medicaid eratives would stop selling right prices for future cov- exchange business by ex- “There is no higher author-
coverage provider Molina coverage on the state- erage. panding slowly and focus- ity than the membership.
Healthcare both said they based exchanges, which Anthem, the nation’s sec- ing on a customer base Through a fair and demo-
are making money off their are a key element in the ond largest insurer, said its it already knows how to cratic process UAW-Ford
exchange business, and ACA’s push to expand in- enrollment in the public serve, low-income pa- members have delivered
Anthem joined Aetna, the surance coverage. exchanges fell by 69,000 tients. job security and strong
nation’s third-largest health Insurers in many markets people to 824,000 in the “We’re not trying to be all economic gains for their
insurer, in reaffirming its have struggled to find the third quarter. Spokeswom- things to all people,” he families and communities,”
2015 earnings forecast. right mix of healthy cus- an Jill Becher said the busi- said. said UAW Vice President
“I think the (ACA) mar- tomers to balance the sick- ness has been less profit- Even though some insurers Jimmy Settles, the union’s
ketplace is going to be er ones since the exchang- able than expected. have made money so far top Ford negotiator, in a
around for a while,” said es opened for business in CEO Joseph Swedish said on the exchanges, industry statement.
Molina CEO Dr. Mario Mo- the fall of 2013. Even busi- in a statement that the in- analyst David Windley sees Union leaders held a press
lina. nesses that reaffirmed surer remains committed room for improvement. In- conference earlier this
surers are still struggling to week to push for the Ford
attract enough healthy agreement when they
patients, and the analyst feared workers would re-
said it’s too easy for cus- ject it. Some workers said
tomers to manipulate the the union didn’t push hard
system by doing things like enough to win back things
signing up for coverage, they lost in previous agree-
using health care, and ments, including annual
then stopping premium wage increases. They also
payments. wanted a two-tier wage
UnitedHealth said Thurs- system eliminated immedi-
day it has been hurt in ately instead of over eight
particular by customers years, as the contract
who signed up for cover- promises.
age outside the annual But union leaders warned
open enrollment window that they might not get
and use more health care a better deal from Ford
in general than those who if workers rejected the
bought coverage during agreement and sent them
open enrollment.q back to the bargaining
table.
Mega-deals may carry into 2016 for health care “If we thought there was
another dollar on the ta-
TOM MURPHY year involved a company health care sector will cool Inc. is spending $48 billion ble, we would have got it
AP Business Writer in health care, and the size any time soon. There is too to buy rival insurer Cigna, the first time,” said Bernie
(AP) - With $2 trillion in buy- of those deals is immense. much to gain. Drugmakers a deal that would create a Ricke, the president of Lo-
outs since January, 2015 Compared with five years still need to buy drugs and combined company pull- cal 600, a large union in
has become the year of ago the total value of companies that promise to ing in well over $100 billion Ford’s hometown of Dear-
the megadeal, fueled by health care mergers and give them a sizeable com- in revenue. These deals born.
free money in a zero-inter- acquisitions in the United petitive advantage and sell also allow companies to The contract raises wages
est rate environment. States has more than tri- the ones that don’t as they combine resources and cut for all workers and gradu-
But with the Fed appearing pled, according to the pare their focus. Health in- expenses at a time when ally eliminates the two-
increasingly keen on hiking data firm Dealogic. surers, doctors and hospitals every element of the sector tier system, which cur-
rates, that party may be Even in the face of rising are pushing to get bigger is feeling pressure to control rently pays newer workers
coming to an end. interest rates, which would and bring more muscle to health care costs. less than veteran ones. It
That is, unless you’re in make deal-making a more their negotiations with each “Health care firms, in gen- promises bonuses of up to
health care. expensive proposition, busi- other over the ever-rising eral, I believe will need to $10,250 per worker this year
Almost one out of every ness insiders see few rea- cost of care. The Blue-Cross get bigger,” Morningstar and annual profit-sharing
four dollars in takeovers this sons why momentum in the Blue Shield insurer Anthem analyst Vishnu Lekraj said.q checks and other bonuses
each year after that.q
