ACA/Obamacare: Largest US Private Health Insurer Has Second Thoughts About On-Exchange Offerings

‘According to enrollment data, more than 500,000 Americans using the exchanges purchased plans from UnitedHealthcare. Those consumers will have to purchase new plans in 2017 should the insurance company leave the exchanges, Ed Haislmaier, a health policy expert at The Heritage Foundation, told The Daily Signal.

“What we’re seeing is that insurers are re-evaluating whether this is a good market to go into,” he said. “Some are expanding; others are having problems, and they pulled back. Over time, what you’ll probably see is fewer insurers offering coverage in the exchanges. We’re already seeing that, even though United expanded in 2015 and 2016, insurers offering coverage is down. It’s going to take a few years to play out.”

Compared to its competitors, UnitedHealthcare was slow to offer products on the exchange when Obamacare first went into effect in October 2013 and sold plans in just four states—Colorado, Maryland, Nevada, and New York—in 2014, according to the state-run exchanges and federal exchange, HealthCare.gov.

However, the insurer expanded its exchange coverage substantially in 2015 and 2016, selling plans in 22 states during the 2015 open enrollment period and 34 states during this year’s open enrollment period.

Competitors Aetna and Humana, by comparison, are offering coverage on the exchanges in 15 states.

Haislmaier said that insurers like UnitedHealthcare may not have prepared for how much plans sold on the exchanges would cost them.

“What you’re seeing is the market itself, and this is attributable to Obamacare, is turning out to be a market that’s predominately low-income individuals between 100 to 200 percent of the poverty line,” Haislmaier said. “They’re buying coverage, getting a substantial subsidy, but gravitating toward the low cost-sharing plans where they get extra subsidies. The enrollees have more of an incentive to use more health care, and that makes those plans more expensive [for the insurer].”

For insurers to profit from the coverage offered on the exchanges, Haislmaier said, they must narrow networks or raise prices, both of which impact consumers.

“The ones who have not narrowed the networks or have been behind the curve on pricing are having losses and reevaluating participation,” he said.’ - How Obamacare Could Limit Insurance Options for Americans in These 34 States, daily signal.com, 11/25/2015