“We will be down to a handful of states that we will be actively participating in the exchanges”, said Stephen J. Hemsley, chief executive officer of UnitedHealth Group, noting that the small market size and higher risk profile of doing business in the exchanges led the insurer to make the decision.
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UnitedHealth didn’t name the Obamacare markets that it’s exiting, though regulators have confirmed at least 13 withdrawals from the 34 states where the company sold plans this year.
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.
“This business remained unprofitable in 2015 and we continue to have serious concerns about the sustainability of the public exchanges”, Bertolini said.
What do you think of UnitedHealth’s plans to pull out of most of the health care exchanges?
OptumCare, where United’s health care delivery systems are located, is a separate company that includes Southwest Medical Associates.
UnitedHealth insured 795,000 Americans through the exchanges at the end of March, the Associated Press reports. About 9 million people would still have three or more plans to pick from.
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. The ACA relies on private health-insurance companies to offer policies that individuals can buy in government-run markets.
UnitedHealthcare’s plan to dramatically curtail involvement in the exchanges would severely limit competition in parts or all of about 10 states – mostly in the South and Midwest, according to an analysis from the Kaiser Family Foundation.
“We’re in the process of determining our 2017 Marketplace rates”, Blue Cross officials said in a statement. But despite those heavy losses, which UnitedHealth previewed late a year ago, the company’s other lines of business like Medicare Advantage and Optum have been making money at a healthy clip.
Other insurers, including Humana and Blue Cross Blue Shield of North Carolina, also have publicly weighed ending their participation in the exchanges because of losses related to attracting too many sick customers and too few healthy ones.
In Georgia, almost 50,000 marketplace enrollees, or 8 percent of the total, would be left with a choice of two insurers. The company offers one of the two lowest-cost silver plans in 14 Pennsylvania counties.
The nation’s largest insurer said Tuesday that its first quarter revenue rose 25%, to $44.5 billion as compared to that three month period in 2015.
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“I think insurers will have to become more selective in terms of which exchanges and how they participate, but by far and away I think the United move will be the biggest one this year”, said Mizuho Securities Managing Director Sheryl Skolnick.
