UnitedHealth to trim ACA exchanges to ‘handful’ of states

UnitedHealth is the nation’s largest insurer, and it is operating on ACA exchanges in 34 states, including in Iowa and IL. Consumers in Alabama, Arizona, Iowa, Nebraska and North Carolina would see the biggest negative effects if UnitedHealth left, the report concludes. “Clearly, there is much work to be done by Congress and our state legislature to better protect consumers and rebuild our private health insurance market”.

“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.

UnitedHealth Group Inc. said Tuesday that it expects to lose $650 million this year on its exchange business, up from its previous projection of $525 million.

The company already announced it was pulling out of several states, including Arkansas and MI.

But Hemsley said that the company will “continue to remain an advocate for more stable and sustainable approaches to serving this market and those who rely on it for their care”.

UnitedHealth offered plans in just four states in 2014 initially in Obamacare.

Despite losses in its public exchange business, UnitedHealth recorded net income of $1.63 million billion for the first quarter this year, up 15.1% from the same quarter last year. “Without UnitedHealth’s participation in 2016, monthly benchmark premiums for the second lowest cost silver plan for a 40 year-old would have been $25 to $100 higher in 304 of 3,142 counties in the USA and more than $100 higher in 13 counties”, wrote the foundation.

Those revenues were driven in large part by Optum, United’s health services business, which raked in $19.7 billion in revenue in the first quarter, up from $12.8 billion over the same period a year ago.

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.

A Kaiser Family Foundation study this month said the company’s exit nationally would only have a modest impact.

The Minnetonka, Minn., company also launched an independent insurance company past year called Harken Health, which sold ACA plans in only two cities, Chicago and Atlanta. The insurer said in November that it would decide by the first half of this year whether to even participate in the market for 2017. Insurers say they also have been hurt by expensive patients who sign up outside regular enrollment windows.

United Healthcare, which now covers the most Americans in the USA (pending the proposed Anthem-Cigna merger), said in its quarterly earnings Tuesday that it is removing its offerings from nearly all Affordable Care Act exchanges by 2017.

The company did not provide the anticipated details in its first-quarter earnings announcement released Tuesday morning or in a subsequent teleconference with securities analysts.