On Thursday, UnitedHealth, the biggest health insurer in the US, said it has suffered deep losses on its exchange-related business.
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Unlike Blue Cross, UnitedHealthcare largely stayed out of the exchanges in 2014, the first year of the Affordable Care Act’s public marketplaces for consumers to shop for insurance.
Hempstead said another way to draw more middle-class buyers who don’t expect to use the plans much would be to change the parameters of what has to be covered so that policies are less comprehensive.
As has been widely noted, UnitedHealth is the nation’s biggest health insurer, but that’s misleading: in the individual market served by Obamacare exchanges, it’s small beer.
“UnitedHealth Group Inc. has scaled back marketing efforts for plans sold to individuals this year and may quit the business entirely in 2017”.
United States officials rushed to defend President Barack Obama’s signature health care reforms Friday after the country’s largest insurer said it might pull out due to large financial losses.
But on Thursday, the insurer reduced its fourth-quarter earnings outlook by $425 million, or 26 cents a share, because of projected losses on exchange plans in 2015 and 2016.
The company lowered its full-year 2015 earnings-per-share forecast to $6, down from $6.25 to $6.35, and shares of UnitedHealth stock fell 5.7% to close at $110.63.
The Connector is dominated by local, nonprofit insurers, including Neighborhood Health Plan, Harvard Pilgrim Health Care, and Tufts Health Plan.
After dropping more than 4% Thursday, the iShares U.S. Healthcare Providers (IHF) climbed nearly 1.9% today, while the SPDR S&P Health Care Services ETF (XHS) climbed 1.8%, recovering from yesterday’s 3% drop.
A customer who was owed a rebate should have received a notice about it by October 30, the agency said. And Kaiser Permanente, which has about 450,000 individual exchange customers across eight states and Washington, D.C., said it’s “strongly committed” to the marketplaces.
“We’ve been very clear with the administration about the serious challenges facing consumers and health plans in this exchange market”, AHIP CEO Marilyn Tavenner said in an e-mailed statement.
UnitedHealth, by contrast, has always been lukewarm about the exchanges. They also didn’t know whether the new business would attract enough healthy customers to balance the expected enrollment of sicker customers who had not been able to find coverage before. “We can’t really subsidize a marketplace that doesn’t appear at the moment to be sustaining itself”, Hemsley said.
Kate Luck, a spokesman for the Department of Human Services, said $6,699,791.16 of the amount went to the state for premiums paid under the private option. Enrollment for 2016 opened earlier this month. Unlike previous years, The Wall Street Journal reports, many people can’t avoid paying more by shopping around on the exchanges. Those lower-premium plans that Obama described as worthless because they didn’t pay out anything were no worse than the plans that replaced them and don’t pay out anything until a consumer has racked up $2,000 or more in medical bills.
UnitedHealth Group’s revelation comes only a few weeks after the company reported third-quarter financials.
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“If they exited (the exchanges), it wouldn’t matter that much to the functioning of the ACA, but it would show why increasing enrollment is so important”, Levitt said. UnitedHealth’s core business is selling employer-sponsored health plans, and it hasn’t been known for its familiarity with or success in the individual market.
