Max Nisen is a Bloomberg Gadfly columnist covering biotech, pharma and health care. He previously wrote about management and corporate strategy for Quartz and Business Insider.

The entire health-insurance industry is in limbo. But Anthem Inc. seems happy there. 

As its peers run screaming from the Affordable Care Act -- over which Republicans are looming with a knife and a tax-cutting gleam in their eyes -- Anthem is sticking around in the ACA's individual exchange market.

Anthem, which reported earnings on Wednesday that topped Wall Street forecasts, still thinks it can break even or profit on ACA plans in 2017. And it's holding out hope for fixes that will let it stay into 2018.

Neither of those things is likely to be true. 

Trump Bump
Anthem's shares have benefited from Donald Trump's election, despite large exposure to the ACA
Source: Bloomberg

UnitedHealth Group Inc. has largely retreated from the public exchanges. After pulling out of multiple states, Aetna Inc. expects its individual exchange enrollment to drop from more than 900,000 at the end of 2016 to 240,000 by the end of the first quarter. Cigna Corp.'s footprint will likely be smaller in 2017, as well.  

Anthem, on the other hand, ended the year with 839,000 enrollees in exchange plans and said Wednesday that enrollment for the new year is ahead of expectations.

Anthem isn't immune to the issues other insurers have cited as reasons for losses, such as slow enrollment and high medical costs that impact margins and profits. The company lost money on exchange plans in 2016.

Anthem's operating margin has been declining for years and lags that of its peers. Its medical loss ratio, or the percentage of premiums spent on health care, exceeds that of its peers. The ACA bears a lot of the blame. 

And Anthem may be underestimating the degree to which things could get worse. Besides the specter of negative policy action, the disappearance of rivals from the ACA will likely expose Anthem to more and sicker patients.  

Leading From Behind
Anthem is sticking with Obamacare despite its flattening effect on margins
Source: Bloomberg

Anthem on Wednesday gave a list of hoped-for exchange reforms. CEO Joe Swedish said he'd like to have clarity on those in the first half of this year, before Anthem has to decide on its involvement in 2018.  

But Congressional Republicans seem to have no consensus and little direction when it comes to repairing, repealing, or replacing the ACA, despite having promised it for more than half a decade.

There is enormous political pressure to get rid of large chunks of the ACA in short order, including the taxes and individual mandate that pay for the whole thing. It's unlikely any list of stopgap fixes will be enough to stabilize the market if that occurs. 

The Trump Administration, meanwhile, seems more interested in prodding the exchanges toward collapse than in helping them function. President Trump signed an executive order designed (albeit ineffectively) to undermine the law, and his administration tried to cut off funding for advertisements meant to boost exchange enrollment. 

There could be a sudden outbreak of bipartisanship, legislative competence, and pursuit of good policy over good politics. But an eventual Anthem exit from parts of the ACA market seems more likely. 

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

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