“This year, in 36 percent of the nation’s counties, families could pick between only one or two insurers on the exchange and, given today’s news, next year looks like it could be even worse”.
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UnitedHealth Group Inc.’s withdrawal from public health insurance exchanges in all but a “handful” of states is unlikely to jeopardize the future of the Affordable Care Act exchanges.
“The smaller overall market size and shorter term, higher risk profile within this market segment continue to suggest we can not broadly serve it on an effective and sustained basis”, CEO Stephen Hemsley said on a first-quarter earnings call Tuesday.
UnitedHealth cited about $1 billion in losses over the past two years for the firm’s decision to significantly scale back its business on the health insurance exchanges created by the Affordable Care Act. While Michigan and Arkansas can probably weather UnitedHealth’s exit, some consumers in Georgia may feel a lack of choices, according to a Kaiser Family Foundation analysis of UnitedHealth’s offerings across the United States. And in February, Covered California Executive Director Pete Lee blasted UnitedHealth for blaming the health law for its own missteps, noting in an interview with Kaiser Health News that the company had poorly designed and priced its health plans. “We have full confidence, based on data, that the Marketplaces will continue to thrive for years ahead”. In Atlanta and Chicago, a new UnitedHealthcare subsidiary, Harken Health, began operating this year and is expected to remain.
Still, a UnitedHealth exit from the exchanges “could be significant in some markets, particularly in rural areas and southern states” where there’s less competition among insurers, the analysis states. United had warned of such a move starting late a year ago, when it revised its 2015 earnings outlook to account for its individual market losses.
UnitedHealth, the largest USA health insurer, began warning in November that it was losing money on its Obamacare policies and might exit some markets.
ObamaCare represents a small fraction of UnitedHealth’s business, which mostly consists of providing medical coverage to millions of people through their employers. Consumers who have to switch to a different plan next year may see their premiums increase.
UnitedHealthcare is the state’s largest health insurer, according to a recent company statement. Its adjusted earnings of $1.81 per share was up 17 percent from 2015 and beat analysts’ expectations by 9 cents.
In Scott County, UnitedHealth offered the second-lowest monthly premiums for a 40-year-old man buying a silver plan, while it had the lowest premiums in Rock Island County, according to the healthcare.gov website.
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Still, UnitedHealth’s overall revenue rose 25 percent in the first quarter and profits rose 14 percent – to $1.6 billion. That report analyzed the effect if United were to drop out of all the exchanges where it participates, and found that 1.1 million people enrolled through the exchanges would have one insurer left to choose from if it withdrew from every market and no other insurers rushed in to fill the gap.
