NEW YORK (Reuters) - Humana Inc will not return to the individual insurance market after it exits the Obamacare exchanges this year, a market that Republicans are trying to repeal and replace through new legislation, Humana’s top executive said on Thursday.
Republicans in the U.S. Senate released a draft of their bill to undo Obamacare, officially called the Affordable Care Act, which reshapes the individual insurance market and the Medicaid program for the poor and reduces taxes.
“This is just not a business that we will be good at,” Humana CEO Bruce Broussard said in an interview, emphasizing that the company, the No. 4 U.S. health insurer, does best managing Medicare Advantage healthcare for older people and the disabled, its specialty.
“No matter what they do in Washington, we are not going to go back in. And we’ve had a lot of people ask us from Washington D.C. if we would go back in and we’ve said no, it’s not there,” he said.
Humana in February announced that it was leaving the individual market, where earlier this year it said it had more than 100,000 customers in Obamacare plans in 11 states. Its departure threatened to leave some counties in some states, such as Tennessee, with no individual insurance choices in 2018.
Other insurers, including Aetna Inc., also pulled out of the exchanges for 2018, while Anthem Inc has mostly pulled out of 3 states and remained in 11 others for next year. Other insurers, like Medicaid specialist Centene Corp and small insurer Oscar Health have said they will expand.
Broussard, speaking to Reuters in one of his first interviews since the deal to be bought by Aetna was terminated earlier this year due to antitrust concerns, declined to comment on recent Wall Street analyst research notes raising the company as a takeover target for rival Cigna Corp.
Cigna CEO David Cordani said on Tuesday in an interview that it was interested in growing its Medicare Advantage business, but declined to comment on the specific possibility of buying Humana.
Broussard said that if the company were to look at any deals, it would be doing it with the expectation that the Justice Department would use the same parameters it did under the Obama administration. Some Wall Street analysts have speculated that the Trump administration might be friendlier to an insurance deal.
“If we were to evaluate a transaction, we would do so under the old environment, because we know that,” he said.
Humana shares were up 1.2 percent at $238.95 and Cigna shares were up 0.8 percent at $171.57 in afternoon trading.
Reporting by Caroline Humer; Editing by Nick Zieminski