Investors who think the negative headlines that Obamacare has recently received are overblown might be tempted to view the opening of enrollment today as an investment opportunity. To be sure, premiums are on the rise and the participation of some large insurance companies is declining. But that's not a complete picture of the system's prospects. The problem for any investor wanting to bet on its success is that the companies involved in it are also facing a load of uncertainty.
Citizens who do not receive healthcare insurance through their employer and are not eligible for Medicare or Medicaid must sign up by Jan. 31 for insurance for 2017, or they will face a hefty fine. The fines could encourage more participation on the part of individuals and make the system more profitable. Meanwhile, for many participants, federal subsidies will offset the premium increases.
That could make companies that continue to participate in the federal and state exchanges a more attractive investment.
Aetna announced that it would reduce its public exchange participation in 2017, from 778 counties to 242.The company will remain on the Delaware, iowa, Nebraska and Virginia exchanges, and declined further comment on its participation in the public exchanges.
The company's share price fell 1.4% Tuesday midday, reaching $105.78 per share.
Humana announced in June that in 2017 it would cut down its public exchange offerings to 156 counties in 11 states, down from 1,351 in 19 states in 2016. The company could not be reached for specifics on the states it would continue to operate in.