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UnitedHealth To Exit Most ACA Exchange Markets In 2017

On Tuesday, UnitedHealth Group’s announcement that it will limit its participation in Affordable Care Act exchanges to just “a handful of states” starting in 2017 received extensive media coverage, including television and print. The company cited growing losses in this market, and while most outlets acknowledge that this move will reduce competition in certain areas, they point out that UnitedHealth’s withdrawal should have only a minimal impact on premiums, given its small share of the market.

The CBS Evening News (4/19, story 9, 0:25) reported that on Tuesday, UnitedHealthCare said “it was pulling out of Obamacare exchanges next year in all but a few states.” The insurer “has had trouble attracting the younger customers who subsidize care for older and sicker patients in 34 states,” and it expects a loss of $650 million this year.

The New York Times (4/19, B2, Abelson, Subscription Publication) reports UnitedHealth said during an earnings call on Tuesday that it is still losing hundreds of millions of dollars on policies sold through Affordable Care Act exchanges, therefore, it intends “to pull out of the majority of states where it offered coverage and would offer policies on the public exchanges in ‘only a handful of states’ for 2017.” UnitedHealth did not specify which markets it will exit, but it covers just 795,000 of the 13 million enrollees in ACA plans. HHS spokesman Ben Wakana said on Monday, “With millions of Americans insured through the marketplaces, it’s clear that this is a growing business for insurers.”

       

The Washington Post  (4/19, Johnson) reports Stephen J. Hemsley, CEO of UnitedHealth Group, said, “We will be down to a handful of states” where “we will be actively participating in the exchanges.” But some experts point out that “while the decision is a clear signal of the troubles insurers face in making money in the marketplaces, it doesn’t mean that other companies will follow suit.” The Post says prior to the insurer’s announcement, the Obama Administration sought to downplay the impact of UnitedHealth’s exit. HHS’ Ben Wakana stated on Monday, “We have full confidence, based on data, that the Marketplaces will continue to thrive for years ahead. The number of issuers per state has grown year-over-year.” He added, “The Marketplace should be judged by the choices it offers consumers, not the decisions of any one issuer.”

       

In a front-page article, the Wall Street Journal (4/20, A1, Mathews, Subscription Publication) reports UnitedHealth, the largest insurer in the US, is expecting its losses to increase from about $525 million to $650 million this year due to the fact that enrollees’ health has worsened. The company posted profit of $1.61 billion, or $1.67 per share for the first quarter of this year, compared to $1.41 billion, or $1.46 per share a year ago, while revenue rose by 25 percent to $44.53 billion. Analysts had predicted revenue of $43.96 billion.





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