(Adds Obamacare details, CEO comments from call, updates stock)
Oct 25 (Reuters) - Anthem Inc reported better-than-expected quarterly earnings as its Obamacare individual insurance business broke even and forecast a slight 2018 profit for the government plans despite uncertainty about the market's future.
Anthem's outlook takes into account President Donald Trump's efforts to undercut former President Barack Obama's health reform law, which he has described as "dead."
Trump has cut off subsidies that help low-income consumers afford out-of-pocket costs and slashed government outreach on the program ahead of the 2018 enrollment period.
Anthem's shares were up 5.8 percent to $206.57 on Wednesday.
Anthem Chief Executive Officer Joseph Swedish said on a conference call that the health of its individual customers was better than expected, contributing to lower medical costs, and it has reset expectations.
The company said the percentage of paid premiums that were spent on claims, a key industry measure, rose during the quarter, but would have gone higher if not for improved medical cost performance in the individual and large employer business.
Anthem, which runs Blue Cross Blue Shield plans in 14 states, said it had cut in half the number of areas where it will sell individual plans in 2018, which will reduce enrollment by 70 percent next year and help profits.
The company raised its 2017 adjusted earnings forecast to $11.90 to $12.00 per share, from more than $11.70.
"The big unknown ... is the stability in the individual marketplace. And that is a story that is going to unfold in the coming 12 to 18 months," Swedish said.
It is unclear if the U.S. government will re-establish cost-sharing subsidies, or try to remove the insurance mandates for individuals and employers.
The Trump administration also wants to introduce health plans with fewer covered benefits to compete with the more expensive Obamacare plans and has reinstated a 3 percent industrywide health insurance tax that the industry wants to end.
Republican and Democratic senators are working on a bill to reinstate subsidies and make other market changes, but Republicans are also mounting a competing effort to change the law.
NET INCOME RISES
Anthem's net income rose to $746.9 million, or $2.80 per share, in the third quarter, from $617.8 million, or $2.30 per share, a year earlier.
Excluding items, the company earned $2.65 per share, ahead of analysts' expectation of $2.42 per share, according to Thomson Reuters I/B/E/S.
Total revenue gained nearly 5 percent to $22.43 billion, above analysts' estimate of $22.05 billion.
Anthem said on Tuesday it will acquire America's 1st Choice, a privately held for-profit Medicare Advantage company, expanding its presence in Florida.
Medicare Advantage, an alternative to standard fee-for-service Medicare in which private insurers manage health benefits, is the fastest growing form of government healthcare. (Reporting by Caroline Humer in New York and Ankur Banerjee in Bengaluru; Editing by Supriya Kurane and Jeffrey Benkoe)