For three of the nation's largest health insurers, the big question this earnings season is: now what?
Nearly two years after pursuing megamergers to compete in the era of Obamacare, Aetna and Humana's $34 billion deal has been blocked by the court, and a ruling on Anthem's $54 billion dealt acquire Cigna is pending.
But now Congress and the White House are poised to dismantle the Affordable Care Act, and the timeline and details of how they'll do it are very much up in the air. As the companies report their earnings, analysts will be looking for insight into how the insurers plan to deal with uncertainty.
"Sales for the health insurers have grown rapidly because of the ACA," driven in part by the expansion of Medicaid under Obamacare, said Jeff Loo, a health care equity analyst with CFRA Research.
While many of the health insurers faced losses on Obamacare exchange plans, overall, over the last five years, the group experienced the biggest earnings growth within the S&P 500 Managed Health Care index, with a compounded annual growth rate of 23.1 percent over the last five years, according to CFRA Research.
"We expect increased volatility as Trump and the Republicans reveal their replacement plans for the ACA.," Loo said.