UnitedHealth Group Inc. (UNH), which sells insurance on only a few Obamacare exchanges, stands to profit from the law nonetheless.
Its Optum technology unit, credited with helping fix the broken federal insurance website, is increasingly being used by state officials to salvage their troubled exchanges.
Over the last four months, as today’s deadline for selling insurance loomed under the health-care law, Optum has worked with Maryland, Massachusetts and Minnesota to strengthen their online marketplaces. While the $31 million in contracts doesn’t mean a lot to UnitedHealth’s annual revenue, Optum is building a reputation that may give them an edge in the future in the $1.1 billion business of building computer systems for social service agencies, analysts and state officials say.
“We went with them because of their successful experience with healthcare.gov,” said Joshua Sharfstein, the Maryland health secretary, in a telephone interview. Since then, he said, “they’ve been a great partner in keeping our system moving forward, and thinking about the future.”
Sign-ups for 2014 coverage under the Patient Protection and Affordable Care Act formally end today, though some who began the enrollment process but didn’t finish it will have a bit more time. More than 6 million people have enrolled as of last week, an effort largely dependent on the performance of healthcare.gov and 14 independent exchanges run by states.
Optum’s role as a go-to company for governments with health-exchange problems has been something of a surprise, given that its parent company — the nation’s largest commercial health insurer — has been wary of embracing the Obamacare rollout.
Five Exchanges
Minnetonka, Minnesota-based UnitedHealth offers health plans on only five local exchanges — Colorado, Maryland, Nevada, New York and Washington, D.C. In comparison, Indianapolis-based WellPoint Inc. (WLP), the second largest U.S. insurer, offers its medical coverage on exchanges in 14 states.
UnitedHealth created its Optum unit in 2011 by pulling together several health-services businesses, including divisions that offer consulting services and that administer prescription drug benefits. In January, UnitedHealth reported that Optum’s earnings from operations surged 43 percent in the quarter compared with a year earlier.
The unit’s Obamacare work can be traced back to UnitedHealth’s 2012 purchase of Quality Software Services Inc., a Maryland-based technology company that had an open-ended contract for technological services with the U.S. Centers for Medicare and Medicaid Services, or CMS, the agency assigned to build the federal online exchange.
Data Hub
While QSSI lost a bid to be the principal contractor for healthcare.gov, it won a smaller contract to build a “data hub” needed to allow an easy flow of tax and other personal information about potential customers between the exchange and various other U.S. agencies. As it turned out, the hub was one of the few pieces of the federal system that worked when the exchange opened for business on Oct. 1.
In late October, as flaws with the website became increasingly public, Andrew Slavitt, Optum’s group executive vice president, contacted Marilyn Tavenner, the CMS administrator, to offer his company’s help, he said in a telephone interview.
At the time, “there was a lot of discussion around a ‘tech surge,’” Slavitt said. “What we said is, ‘A tech surge is certainly important. What we think you might also need is an operational and organizational surge.’”
Date: Mar 31, 2014