UnitedHealth, America’s largest health insurance provider, says it will exit from most ObamaCare exchanges next year, citing more than $1 billion in losses.
CEO Stephen Hemsley says his company “cannot continue to broadly serve the market created by the Affordable Care Act’s coverage expansion due partly to the higher risk that comes with its customers,” as reported by the Associated Press.
The announcement came after UnitedHealth revised its projection for 2016 to $650 million in losses, up from a previous estimate of $525 million, after ending 2015 some $475 million in the red.
As the AP tells it, UnitedHealth had “second thoughts” almost immediately after announcing it would expand participation from four state exchanges to 34.
As of last November, the company was debating a complete exit from all ObamaCare exchanges, but has apparently decided to remain active in a “handful” of states, which Hemsley did not specify in his conference call to report company earnings. It has already been announced that the company was pulling out of Arkansas, Georgia, and Michigan.
The Washington Post cites a Kaiser Family Foundation study that estimated about 1.1 million ObamaCare customers would be left with a single insurance provider to “choose” from, if UnitedHealth withdrew from every ACA exchange. According to this analysis, “the impact could be significant in some areas, particularly in rural areas in Southern states.”
The Associated Press notes that some other big insurance players, such as Aetna, have reported heavy losses from the ACA exchanges, and are expected to “trim their exchange participation in 2017.”
“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 last year,” the AP adds.
