UnitedHealthcare will exit Arizona marketplace

UnitedHealthcare announced it will exit the Affordable Care Act marketplace in Arizona next year, reducing or even eliminating options for rural communities reports the Arizona Republic.

UnitedHealthcare said Tuesday that it will quit marketplaces in a "handful of states." While the insurer did not announce which states it would quit, they wrote a letter to the Arizona Department of Insurance stating it won't sell individual plans to Arizonans next year.

Along with Blue Cross Blue Shield of Arizona, who also said it will evaluate “all options,” UnitedHealthcare is one of the only two insurers that sold to every marketplace in Arizona.

Blue Cross cited losses of $185 million on individual plans in 2014 and 2015, while UnitedHealth CEO also stated the financial difficulty of the federal marketplace as the reason for their withdrawal. "The losses are not really something that are sustainable," Jeff Stelnik, Blue Cross Blue Shield's senior vice president of strategy, sales and marketing, told the Republic. "We have to look county by county and make sure it makes sense to offer a product going forward."

"The smaller overall market size and shorter-term, higher-risk profile within this market segment continue to suggest we cannot broadly serve it on an effective and sustained basis," said UnitedHealth Group CEO Stephen Hemsley. "Next year, we will remain in only a handful of states, and we will not carry financial exposure from exchanges into 2017."

"My concern is that rural Arizona is left with too few choices," said Kim VanPelt of Vitalyst Health Foundation, as quoted by the Republic.

The exit of the only Arizona health-care insurance companies available through the ACA marketplace in eight counties, where more than 30,000 people chose a plan, leaves residents without a way to purchase a subsidized healthcare plan through the federal marketplace and could leave those in rural counties without a way to get subsidized health insurance.