UnitedHealth had previously said that it lost $475 million on the ACA exchanges last year and could lose another $500 million this year.
Advertisement
UnitedHealth has already made a decision to pull out of Arkansas, Georgia and MI in 2017, and Hemsley told analysts during a Tuesday morning conference call that his company will not carry financial exposure from the exchanges into 2017.
“We continue to remain an advocate for more stable and sustainable approaches to serving this market”, Hemsley added.
News of the losses came the same day UnitedHealth Group – the nation’s largest private health insurance company – said it was pulling out of most state marketplaces by 2017, including Nebraska’s. A new analysis from the Kaiser Family Foundation, however, notes that UnitedHealth’s exits would only have a modest effect on competition and prices nationally since it has a small ACA footprint and charged higher premiums from the outset.
A top insurer in the US, UnitedHealth specializes in large-group employer health plans but serves a relatively low number of people in Affordable Care Act (known colloquially as “Obamacare”) markets.
Despite families not receiving better health care under ObamaCare, UnitedHealthcare now exchanges services in 34 states and covers 795.000 people.
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.
Last year, UnitedHealthcare said it was losing hundreds of millions of dollars on the Obamacare plans and would decide its future participation by mid-2016.
UnitedHealth said it expects to lose $650 million in the exchanges this year.
An estimated 800,000 of UnitedHealth Group’s total of 13.5 million customers are enrolled in policies sold on exchanges.
A dozen nonprofit health insurance cooperatives created by the ACA to sell coverage on the exchanges have already folded, and the survivors all lost millions a year ago. Insurers have complained in the past about customers signing up for coverage within the exchanges outside established enrollment periods while bringing with them expensive claims, the Associated Press reported. “In another, 29 percent of counties (532) where United now participates, there would be two exchange insurers as a result of a withdrawal”.
UnitedHealth moved slowly into this newly created market by participating in only 4 exchanges in their first year, 2014. The company said revenue growth was attributable to growing market demand for UnitedHealth’s product and service offerings. On an adjusted basis the health insurer earned $1.81 per share, compared with Wall Street analyst expectations for earnings of $1.72 per share, according to ThomsonReuters I/B/E/S.
Advertisement
The company saw particularly strong results with its health service business Optum, which consults with industry players on how to cut costs and better the quality of care. Revenues in the first quarter of 2016 were $44.5 billion, which is up 25% from the same time previous year. In recent months they said they will continue to sell exchange plans.
