Largest Provider of Obamacare Cites Unsustainable Net Losses
In a conference call held early Thursday morning, UnitedHealth Group announced it may withdraw from providing health insurance on the Obamacare federal health exchanges beginning in 2017. Because of its participation in the Affordable Care Act (ACA) state health exchanges, the company projects it will lose more than $400 million this quarter and roughly $700 million in 2015. Other health insurance companies like Humana and Aetna have also recorded losses.
UnitedHealth has reported trends for the federal health exchanges tend to have chronic or severe illnesses, and therefore are more expensive to cover. As a result, premiums under the ACA continue to rise at alarming rates. In some states, health insurance premiums have increased more than 10 percent. UnitedHealth Chief Executive Officer Stephen Hemsley said, “We can’t subsidize a market that doesn’t appear at this point to be sustaining itself.” The company has suspended marketing for 2016 exchange plans.
The United Health group, or United Healthcare (UNC), is the largest health insurance provider in the United States, with $112.7 billion share of the insurance market. In 2014 alone, United Health accrued approximately $100 billion in premiums over 27 million policies.
Recent failures such as UnitedHealth, Humana, Aetna, many co-ops and dismal enrollment numbers continues a record of poor outcomes for ACA implementation. If UnitedHealth follows suit with withdrawal from the ACA marketplace, more than 500,000 people will be without health insurance.