Just five months after UnitedHealth announced it was scaling back marketing efforts of insurance plans offered under the Affordable Care Act and threatened to pull out of Obamacare altogether, the nation’s largest health insurer says it will exit exchanges in all but a “handful” of the 34 states where it now operates by 2017.
Following mounting losses on its individual market policies, UnitedHealth Group plans to exit the Affordable Care Act marketplaces in all but “a handful” of states in 2017.
According to the U.S. Department of Health and Human Services, 39 health insurers stopped doing business in one or more states this year, while 40 entered new markets.
As it sheds those exchanges, UnitedHealth Group says it expects $182 billion in revenue this year, and earnings when adjusted of $7.75 to $7.95 per share.
UnitedHealth’s decision to stop offering the ACA plans next year means that people who are now enrolled with the insurer in those states will have to choose a new health insurance provider next year. In North Carolina, a quarter of the state’s consumers will see their choices drop to one for next year, according to an analysis from the Kaiser Family Foundation.
At Aetna’s earnings call for the fourth quarter of 2015, Aetna chief executive Mark Bertolini said the insurer was concerned about the exchanges. In order to compete, she said the insurer priced below competitors, attracting patients who were sicker and thus racked up higher health costs.
In Arkansas, there would be a drop from four insurers to three insurers in every county if a new insurer did not replace the company. California and Wisconsin have said they do not disclose companies’ plans until the list of participating companies is published each year.
The company had signaled a larger exchange exit in late 2015.
UnitedHealth Group Inc. signage stands in front of the company headquarters in Minnetonka, Minnesota. She noted the company did not participate in the first year of the exchanges, and said the company has never been a strong player in the individual market, focusing more on the employer market in Georgia.
The government said in February that more than 12 million people had signed up for Obamacare-related insurance through HealthCare.gov or a state-based exchange as of January 31. “It’s like any other thing the fewer people that off the product or the service, the more the price goes up”. “In total, 1.8 million enrollees would go from having a choice of three insurers to two, and another 1.1 million would go from having a choice of two insurers to one”. UnitedHealth offers the lowest or second-lowest cost silver plan in 35% of the counties where it participated this year, representing about 16% of enrollees overall, according to Kaiser. But insurers have complained that they can’t make money in the marketplace programs.
UnitedHealth offers the lowest or second-lowest cost silver plan in 35% of the counties where it participated this year, representing about 16% of enrollees overall, according to Kaiser. But insurers have complained that they can’t make money in the marketplace programs.
Date: April 30, 2016