UnitedHealth Group Inc. will make a much bigger play on the nation’s health insurance exchanges this fall, but the Minnetonka-based insurer still won’t be competing close to its corporate home.
On Friday, UnitedHealth is announcing the 23 states where it plans to compete for health exchange business starting Saturday — a roster that’s up significantly from the four states where the insurer was competing this year.
Even with the expansion, Minnesota isn’t on the list because of a noncompete agreement with Minnetonka-based Medica, which hires United for claims processing and certain back-office functions.
For the first time, UnitedHealth will offer products through the exchange operating in Wisconsin, but not in the counties closest to the Twin Cities, said Heather Kane, vice president of exchange strategy at the company’s UnitedHealthcare division. Insurers can select the counties in a state where they want to compete for exchange business.
“The markets that we’re entering are where we already had a presence, often in the individual [market] space and certainly in the group [market] space,” she said. “So, we are typically operating within the footprint that we already operated in from a commercial group perspective.”
The federal Affordable Care Act called for the creation of health insurance exchanges for all 50 states starting last year. Some states, including Minnesota, opted to create their own online marketplaces to comply with the law. Most states, including Wisconsin, are covered by the federal government’s HealthCare.gov insurance exchange.
The marketplaces are the only place where people buying individual policies can receive federal tax credits that discount premium costs. So, the exchanges are expected to be a source of new business for insurance companies, since many uninsured people likely will use the marketplaces to comply with the federal health law’s mandate for most individuals to have coverage.
The penalty for not having health insurance will increase next year. Most of those without coverage will pay a fine that’s the higher of two amounts — either 2 percent of yearly household income, or $325 per adult in a household plus $162.50 per child.
More than 7 million Americans signed up for 2014 policies through the exchanges and the government had been expecting the figure to grow to 13 million by the end of next year. But earlier this month, the Congressional Budget Office scaled back growth projections, saying total enrollment next year likely would grow to just under 10 million.
“We can’t really speculate on that,” Kane said when asked about the new forecast. “It’s such a new marketplace.”