UnitedHealthcare exiting most Obamacare exchanges in 2017

The nation’s biggest health insurer is trimming its participation in the Affordable Care Act’s health insurance marketplaces to only a “handful” of states.

UnitedHealthcare CEO Stephen Helmsley made the announcement on the company’s quarterly earnings conference call Tuesday, citing the projected loss of $650 million on its exchange business in 2015, up from the original projection of $525 million.

"Next year we will remain in only a handful of states, and we will not carry financial exposure from exchanges into 2017,” Helmsley said on the conference call, according to Business Insider. “We continue to remain an advocate for more stable and sustainable approaches to serving this market and those who rely on it for their care.”

Despite the losses attributed to its exchange business, UnitedHealthcare reported 25 percent growth in its first quarter earnings, recording revenues of $44.5 billion.

UnitedHealthcare had offered plans in 34 states, after participating in only four in 2014. Helmsley said its exchange enrollment numbers grew to 795,000 as of March of 2016, adding that he expects a drop to 650,000 by December.

State regulators had already confirmed the company’s exit from marketplaces in Arkansas, Michigan, Louisiana, and Oklahoma for 2017.

Helmsley didn’t speak in detail about which states would be included in the “handful” where UnitedHealthcare will remain a marketplace participant, but the Wall Street Journal reports Nevada and Virginia are among them, while the Pittsburgh Post-Gazette says it will still offer plans on the Pennsylvania exchange.

The company said one of its subsidiaries, Harken Health, will continue offering coverage through the marketplaces in Illinois and Georgia.

The U.S. Department of Health and Human Services attempted to downplay the significance of UnitedHealthcare’s departure from exchanges after it was announced.

“As with any new market, we expect changes and adjustments in the early years with issuers both entering and exiting states,” said HHS press secretary Jonathan Gold. “The Marketplace is a reliable source of coverage for millions of Americans with a robust number of plan choices. We have full confidence, based on data, that the Marketplaces will continue to thrive for years ahead.”

HHS said UnitedHealthcare insured 6 percent of all enrollees in the marketplace, and criticized its plans for not being “competitively priced” compared to other lowest-cost silver plans in Michigan, Georgia, and Arkansas.

Before the conference call, The Kaiser Family Foundation had forecasted that if UnitedHealthcare pulled out of the exchanges, 1.1 million enrollees would only be able to choose plans from one insurer instead of two. Another 1.8 million would see their options reduced to two insurers instead of three.

Consumers in Southern and Midwestern states will be the most affected, according to Kaiser, though the consequences would vary from state to state. In Kansas and Oklahoma, only one insurer would remain if no other insurer takes UnitedHealthcare’s place. 

The departure would only have a modest impact on premiums, Kaiser said, with its analysis showing UnitedHealthcare’s participation having only a minor impact on the average cost of coverage through the marketplaces.