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HealthNet says quarterly membership in public exchange plans declined

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(Reuters) — Insurer Health Net Inc., which is being bought by rival Centene Corp, said it lost members in its individual business that sells plans under the health care reform law, echoing thoughts of larger rivals in the sector.

Many insurers have been losing money on the plans, in part because total enrollment has been sharply lower than initially anticipated and due to higher-than-expected patient costs. In November, UnitedHealth Group Inc. said it may completely exit the Affordable Care Act exchange business.

Humana Inc. said in January that it had set aside 74 cents per share in the fourth quarter to cover anticipated shortfalls in its 2016 individual health plan business, while Anthem Inc. said the plans had weighed on its results.

California-based HealthNet’s individual enrollment fell 6.6% from last year, as fewer members bought plans, especially in Arizona and the Northwest.

HealthNet, which expects the deal with Centene to close by the end of the year, said total quarterly revenue rose 7.4% to $4.04 billion, lower than the average analysts’ estimate of $4.20 billion according to Thomson Reuters I/B/E/S.

The company, which also missed adjusted earnings estimate for the first time in five quarters, struck a deal to be bought by Centene in July for $6.3 billion.

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