Health Net says quarterly membership in Obamacare plans declined

[February 26, 2016]  (Reuters) - Insurer Health Net Inc, which is being bought by rival Centene Corp, said it lost members in its individual business that sells plans under Obamacare, echoing thoughts of larger rivals in the sector.

Many insurers have been losing money on the plans, in part because total enrollment has been sharply lower than initially anticipated and due to higher-than-expected patient costs. In November, UnitedHealth Group Inc said it may completely exit the Obamacare business.

Humana Inc said in January that it had set aside 74 cents per share in the fourth quarter to cover anticipated shortfalls in its 2016 individual health plan business, while Anthem Inc said the plans had weighed on its results.

California-based Health Net's individual enrollment fell 6.6 percent from last year, as fewer members bought plans, especially in Arizona and the Northwest.

Health Net, which expects the deal with Centene to close in the first quarter, said total quarterly revenue rose 7.4 percent to $4.04 billion, lower than the average analysts' estimate of $4.20 billion according to Thomson Reuters I/B/E/S.

The company, which also missed adjusted earnings estimate for the first time in five quarters, struck a deal to be bought by Centene in July for $6.3 billion.

(This story corrects paragraph five to say the company expects the Centene deal to close in the first quarter, not end of the year; fixes company's name to Health Net in headline, paragraphs four and six)

(Reporting by Amrutha Penumudi in Bengaluru; Editing by Shounak Dasgupta)
 

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