UnitedHealth Group might be a more credible voice on universal health insurance coverage and Medicare for All if it hadn’t been the first big company to bag the public exchanges where lots of low-income people in recent years have bought their health insurance.

The exchanges that came with the Affordable Care Act were never really a big part of the business for UnitedHealth, but its experience with the ACA says a lot about how big insurance companies react to changes out of Washington that are meant to improve the lives of Americans.

The big companies are happy to help, so long as it doesn’t cost them anything.

This was all in the news last week because UnitedHealth CEO David Wichmann decided to share his disdain for the potential of Medicare for All at the start of an investor conference call, citing the “wholesale disruption” in the healthcare system that would follow if it ever got enacted.

His comments came on a day that the Minnetonka-based company reported excellent growth in revenue and profitability, along with rising financial expectations for the year.

Yet the stock slipped 4% on the news. One explanation is that UnitedHealth, the biggest company in the business, suddenly seemed a little worried about Medicare for All.

It’s no surprise UnitedHealth doesn’t much like the Medicare for All ideas that are currently getting a lot of attention, because they generally would mean that the government would be funding all the health care.

“The path forward is to achieve universal coverage,” Wichmann told investors and analysts last week. “And it could be substantially reached through existing public and private platforms.”

What’s existing, of course, includes the provisions still more or less intact under the ACA, including public exchanges for people to sign up for subsidized insurance.

The ACA was signed into law in 2010 but was implemented over years. One of the main goals of the legislation was to get more Americans covered by health insurance, and the number of Americans without insurance declined by almost half, down from 16% in 2010.

One policy idea was to get consumers to shop for health insurance among competing plans through online exchanges, where those eligible could sign up for subsidies. When the exchanges opened for business in the enrollment period for 2014, they were not particularly easy to use. And that’s if the websites worked at all.

UnitedHealth Group’s Optum unit helped out late in the process to try to make the federal exchange work better and provided assistance here in Minnesota, too. But as an insurer UnitedHealth only tiptoed into the exchange-related business. It wasn’t long after it did that the trouble started.

The news that UnitedHealth might be pulling out of the exchanges broke big in November 2015, with a middle-of-the-quarter news release from UnitedHealth.

Insuring people through health care exchanges like HealthCare.gov wasn’t a very big part of UnitedHealth’s business, but that day the company outlined about $700 million in operating losses, which included about $275 million of expected 2016 losses it pulled into 2015.

The problems the company talked about were real, including rules that proved to be too lax on how people could sign up for insurance outside of normal annual enrollment periods. Too many people were coming onto plans when they wanted care covered by insurance and then disappearing.

“No, we cannot sustain these losses,” said then-CEO Stephen Hemsley, in response to a question on an investor conference call. “We can’t really subsidize a marketplace that doesn’t appear at the moment to be sustaining itself.”

In 2017 UnitedHealth was on the exchange in only three states, down from 34 in 2016. Last summer it was news when UnitedHealth actually had to return to a public exchange in Massachusetts.

One interesting aspect of this is that the exchange-related market did finally stabilize, but the actions of UnitedHealth along with a couple of its competitors show just how national insurers run their businesses.

A national insurer is really just a big company, working in a system that is still largely run state-by-state. So these companies can move in and out of markets depending on whether they think they can make money.

It can be disruptive to people when their insurer quits a market. Even if the insurance is largely the same kind of plan, a new insurance carrier means unfamiliar bills and other documents and an unfamiliar website to check on your coverage.

Of course, Blue Cross and Blue Shield of Minnesota can’t really quit our state. HealthPartners and Medica can’t quit it, either. Part of why companies are encouraged to have capital is an expectation that they stay in the market and use their capital cushion to ride out the ups and downs.

Various units of government are funding a lot of what UnitedHealth does right now, including serving more than 5 million members in its Medicare Advantage plans. UnitedHealth serves a lot of members on Medicaid, too, a program for people who simply can’t afford health care and health insurance.

On last week’s investor conference call, an analyst asked UnitedHealth about quitting the state of Iowa, where in late March the governor said UnitedHealth was going to exit Iowa’s Medicaid program this summer. UnitedHealth has about 425,000 Iowans in its Medicaid plans.

When the breakdown spilled into public view, Iowa state officials blamed UnitedHealth and UnitedHealth blamed state officials. From a distance it’s impossible to say who may be right.

Yet if Wichmann were serious that UnitedHealth is a positive force in achieving the goal of universal coverage through existing programs, you would think UnitedHealth might have found some way to keep serving more than 400,000 poor or disabled Iowans.

 

lee.schafer@startribune.com 612-673-4302