Fearing financial losses, UnitedHealthCare CEO Stephen Hemsley said the insurance company will pull out of most public health care exchanges by 2017 during an earnings call on Tuesday.
“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,” Hemsley said. “Next year, we will remain in only a handful of states, and we will not carry financial exposure from exchanges into 2017.”
UHC is the nation’s largest insurance company. In 2016, UHC participated in the public exchanges of 34 states and offered one of the two cheapest plans available in 21 percent of U.S. counties, according to the Kaiser Family Foundation.
So far, the insurer has confirmed it will pull out of public exchanges in Arkansas and Michigan and withdraw partially from the exchange in Georgia.
It is unclear whether UHC will pull out of Wisconsin’s federally-facilitated Affordable Care Act exchange.
A study released by the KFF on Monday found United’s withdraw from marketplaces in 2017 “could have a significant impact on insurer competition and premiums in some markets, though it would have a minimal effect on the average benchmark premium nationwide.”
The study estimated monthly benchmark premiums for a 40-year-old enrolled in low-cost silver plan through an ACA exchange would have been $25 to $100 higher in 304 of 3,142 U.S. counties, and more than $100 higher in 13 counties if UHC had withdrawn from all markets this year.
“A UnitedHealth exit would likely affect premiums most in Alabama, Arizona, Iowa, Nebraska and North Carolina,” Kaiser foundation representatives wrote in a statement released Monday. “Since UnitedHealth often is not one of the lower cost plans, the effect nationally on premiums of an exit by the insurer would be modest.”
The KFF warned, however, that the insurer’s withdrawal from the market could limit competition in some areas. According to the study, 1.8 million ACA enrollees would have a choice between only two insurers and an additional 1.1 million would only be able to buy a plan from one insurance company. Decreased competition could increase rates.
But even if UHC leaves all ACA markets, most U.S. counties and around 8.9 million ACA enrollees would still have a choice of three or more insurers, the analysis concludes.
In Wisconsin, UHC’s exit from the public exchange would have a small impact on competition — only one county in the state wouldn’t have a choice in an insurer.
