Cigna will shrink its Affordable Care Act footprint and will not expand its exchange product to 10 states next year as originally planned, President and CEO David Cordani said during a third quarter earnings call Thursday.
"We have been cautious and slow in this space," Cordani said.
Cigna originally entered five markets, grew to seven states and had planned to expand to 10. But after assessing its seven markets in 2017, Cigna will shrink its geographic footprint and remain in seven states, according to Cordani.
It is leaving Georgia and Texas in 2017, but is entering the Chicago and Raleigh, North Carolina markets, according to Forbes.
While revenue growth is expected in the ACA, Cordani said, "We continue to plan for a loss in the business … we'll look to see if there is a sustainable future here."
In 2014, the original view of the market -- that it would be not profitable for the industry -- has proved to be more right than wrong, he said.
On Wednesday, Anthem warned it could scale back its products in the ACA market in 2018 if losses continued. Other insurers, such as Aetna and UnitedHealth, have already left numerous ACA markets.
[Also: Cigna to offer telehealth for marketplace plans]
Cigna's profit for the third quarter was $503 million, compared with $593 million for the third quarter of 2015, according to the earnings statement. However, revenues increased 5 percent over the third quarter of the previous year, led by a strong commercial performance.
Value based arrangements are working, according to Cordani, who said Cigna has 160 collaborative care arrangements in 29 states. Eighty-two percent of collaborations with medical groups have outperformed the market in medical costs, he said.
Costs related to Cigna's proposed merger with Anthem, and a litigation matter, totalled $71 million after tax, according to the statement.
The Department of Justice has blocked the proposed $54 billion merger. Trial is scheduled to begin November 21.
[Also: DOJ files motion to get hostile Anthem, Cigna letters]
Cordani also addressed sanctions the Centers for Medicare and Medicaid Services levied earlier this year after an audit of Cigna-HealthSpring found deficiencies in Part C and D appeals and grievances, as well as in several areas of Part D.
The sanctions temporarily barred Cigna from enrolling new customers into its Medicare Advantage and stand-alone prescription drug plans, and from marketing efforts.
CMS has yet to give a date for the lifting of the sanctions. Cigna has been unable to enroll customers during Medicare's open enrollment which began in mid-October. Cordani said $100 million will be coming back to the company after the sanctions are lifted.
Twitter: @SusanJMorse