As a result, however, some of the marketplaces could be left with only one participating insurer, contrary to the intent of the law to stimulate competition to hold down health care costs. UnitedHealth has been selling ACA policies in North Carolina for two years and operates in 77 counties in the state.
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UnitedHealth has been criticized for its approach to ACA exchanges. Many of those people may flock to Blue Cross Blue Shield or two other companies who offer health care insurance for Nebraskans on the marketplace, provided all of them remain in the program.
UnitedHealth offered insurance in 33 states in 2016, so reducing that number down to a handful means the change will affect more than half the country. More states are expected to be added to the list as regulators are notified.
“We know by looking at the number of choices that are available, the number of insurance companies…that the marketplace remains attractive for health insurance companies”, says Counihan.
Benjamin Wakana, a spokesman for the Centers for Medicare & Medicaid Services, said the government expects insurers to make adjustments in entering and exiting states. “We have full confidence, based on data, that the marketplaces will continue to thrive for years ahead”.
The impact of UnitedHealth’s departure from the marketplaces would be modest nationally, but significant in some states, where premiums would rise and consumers would have less choice, according to the Kaiser Family Foundation. At the close of 2016 enrollment in February, around 13 million people purchased their insurance through the exchanges.
So far, NY and Nevada have confirmed that UnitedHealth plans to remain on their ACA exchanges next year. Wisconsin said it hasn’t received an exit notice from UnitedHealth, and that it doesn’t comment on insurers’ business plans.
The national average monthly premium for the silver plans this year would have been only 1% higher without UnitedHealth, the analysis showed.
UnitedHealth had expanded to almost three dozen state exchanges for 2016, but company CEO Stephen Hemsley said Tuesday that losses from the exchanges will eclipse more than $1 billion for 2015 and 2016.
UnitedHealth Group Inc. said Tuesday that it expects to lose $650 million this year on its exchange business, up from its previous projection for $525 million.
Insurance experts say the problem in some states is that there are not enough people participating in the exchanges to allow insurers to spread the risk over a large group of people. Their initial wave of customers generated higher-than-normal claims in part because some of the uninsured had not used the health care system for years and were waiting for coverage to help pay for needed care.
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Other publicly traded insurers such as Aetna have said that they have lost money on this business as well. In recent months they said they will continue to sell exchange plans.
