“We will be down to a handful of states that we will be actively participating in the exchanges”, Stephen J. Hemsley, UnitedHealth Group CEO, was quoted by The Washington Post.
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After expanding to almost three-dozen states this year, the company has already planned to pull out of Arkansas, Georgia, and MI in 2017. At the time, it said it planned to re-evaluate involvement in the exchanges because participation had “tempered industrywide, co-operatives have failed”, and because analysts had projected an even harder time making money in the markets because of what UnitedHealth called “higher risks and more difficulties”.
Health and Human Services spokesman Ben Wakana said the government expected insurers to enter and leave exchanges in their early years, and they have confidence that the new marketplace “will continue to thrive for years ahead”.
UnitedHealth said it expects to lose $650 million on exchange business this year, up from a previous estimate of $525 million.
Mike Rhoads, deputy commissioner of the state Insurance Department, said about 5,000 Oklahomans now are covered by UnitedHealth plans sold on healthcare.gov. Some 95 percent of the 135,000 residents covered are insured through BCBSOK, he said.
“Next year we will remain in only a handful of states, ” Hemsley said, according to USA Today, adding that the company will not have financial exposure from any exchanges in 2017.
UnitedHealthcare signaled past year that it was reconsidering its presence on the exchanges after losing hundreds of millions of dollars. As the Affordable Care Act’s $20 billion “reinsurance” subsidy for health insurance comes to an end, “more carriers will likely be taking a hard look at whether it remains financially feasible for them to continue offering exchange coverage”, he wrote.
Nationwide, UnitedHealth offered ACA plans in 34 states for the current year.
Other major insurers have also taken losses, but say they are ready to stick it out. “The marketplace should be judged by the choices it offers consumers, not the decisions of any one issuer”, he added. But some companies, like Molina Healthcare, have said they have managed to turn a profit from the exchanges.
Overall, UnitedHealth’s net income climbed to $1.61 billion in the first quarter, with adjusted earnings totaling $1.81 per share.
The report also analyzed premium data to pinpoint the impact of the company’s departure from the Obamacare program, especially how it would affect the availability of the highly popular “silver” plan, one requiring lower co-payments and other out of pocket costs. The company also raised its forecast for 2016 and announced first-quarter results that beat expectations. UnitedHealth joined the California marketplace in 2016 in several rural markets and only had enrollment of about 1,400 people as of February.
In Illinois, UnitedHealthcare sells ACA-compliant health plans in 27 counties. It saw $19.7 billion in revenue during the first quarter as compared to $12.8 billion during that quarter a year ago.
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UnitedHealth shares jumped 2.1 percent, or $2.69, to close Tuesday at $130.50.
