United Health Plans to Exit the Obamacare Exchanges
U.S. health insurer UnitedHealth stated on the day of Tuesday that it would highly exit the Obamacare individual insurance market in the year 2017, citing hopes for mounting losses from the program.
UnitedHealth is the greatest U.S. health insurer and one of the largest sellers of policies on the exchanges, which were made as part of President Barack Obama’s national healthcare law. UnitedHealth sells these policies in 34 states this year, up from 25 states previous year.
“Next year, we will sustain in merely a handful of states,” UnitedHealth CEO Stephen Hemsley claimed in prepared remarks as part of the company’s 1st-quarter earnings report.
The company cautioned the investors late previous year that it was losing money on the new policies and might exit the market. On the day of Tuesday, the company raised its 2016 expectation for losses on the exchanges by $125 million to $650 million.
UnitedHealth’s Hemsley stated that the shorter term, higher risk profile of the recent members, as well as the smaller in comparison to expected enrollment, recommended UnitedHealth couldn’t offer policies on a sustained basis.
Other health insurers involving Aetna Inc and Anthem Inc are also major players on the exchanges. In latest months they claimed that they’ll continue to sell exchange policies.
The company has 795,000 clients from the exchanges, more than half of them new to UnitedHealth, it said. It hopes about 650,000 members by year end.
The government claimed in the month of February that more than 12 million persons had signed up for Obamacare-related insurance through HealthCare.gov or a state-based exchange as of the month Jan. 31. Previous government hopes had been for more than 20 million persons.
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