Wipro expects clarity on US health insurance law 'Obamacare' by November

Abidali Neemuchwala, chief executive officer of information technology major Wipro, said the company expects to have clarity by November on the future of 'Obamacare', the United States (US) law on extending health insurance, or its alternative from the Trump administration.

Either will impact its revenue from the health care business, slowing in recent quarters. Last week, the US Senate rejected the latest attempt to repeal or overhaul Obamacare, the law named affter the former US president.

Obama's sucessor, Donald Trump, campaigned on a promise of repealing Obamacare. However, a credible alternative which is politically palatable enough hasn't come forth.

In February 2016, Wipro had acquired HealthPlan Services, a Florida-based information technology (IT) service provider for health insurance. It lost about 50 clients which were to use the platform to facilitate millions of health insurance policies.

"My feeling is that before November, October or November, the time when open enrolment happens for the next year, some clarity has to emerge. Otherwise, I do not think (nearly) 20 million people will be left uninsured. Some clarity should emerge," Neemuchwala told Business Standard.

Health insurance is purchased through health exchanges or marketplaces in the US and Wipro provides a software platform for these exchanges.

During the June quarter, it earned a little less than 15 per cent of its $1.97 billion revenue from the 'healthcare and life sciences' division. At $292 million of revenue here, the company saw a 3.1 per cent drop from the previous quarter. In the past four quarters, said Neemuchwala, "on a run rate basis, Wipro has lost revenue of about $120 mn in that particular business".

Wipro has factored the impact of softness in health care in the July-September quarter forecast. "A significant de-growth in our health care business, impacting or offsetting the core business growth in the US," he conceded to analysts on Thursday.

Delay in decision making on an alternative platform for Obamacare impacted the contribution from HealthPlan Services. "We did not know that the HPS acquisition will give us headwinds in the health care space," added Neemuchwala.