UnitedHealth Group is pulling the plug on Harken Health, a subsidiary that sells health insurance coverage coupled with unlimited primary care at company-owned clinics in Atlanta and Chicago.
It’s the latest example of how a new name in health insurance that was launched to capitalize on opportunities with the federal Affordable Care Act has been shuttered following financial losses.
“Harken Health will be phasing out of current membership in the two states where it operates and closing the business,” UnitedHealth Group said in a statement on Tuesday.
Minnetonka-based UnitedHealth Group operates UnitedHealthcare, which is the nation’s largest health insurer, but launched Harken Health for 2016 as an independent subsidiary.
Harken said in a regulatory filing this week that it won’t sell coverage to individuals in the “off-exchange” market for 2018, a decision that extends Harken’s move last year to drop out for 2017 of government-run health exchanges in Georgia and Illinois.
In its statement, UnitedHealth Group said Harken Health also will stop providing coverage to employer groups once current contracts expire.
The health law brought new rules and federal tax credits to the individual market, where self-employed people and those who don’t get job-based benefits buy coverage. Several start-ups have failed or run into financial troubles, however, just as many established health insurers including UnitedHealthcare have posted losses in the market.
For 2016, Harken Health reported a net loss of $63.7 million. Since 2015, the subsidiary has received $160 million from its parent company via cash and capital infusions.
As of March, Harken was selling individual coverage to about 3,000 people in the off-exchange market. The “on-exchange” business had been a much larger source of membership and revenue. In the small-employer market, the insurer in March was covering 370 people.
UnitedHealth Group launched Harken Health for 2016 with an innovative approach to health insurance. Beyond selling coverage, Harken offered subscribers unlimited access to primary care, with no copays, so long as people sought treatment at one of Harken’s health centers. More than just clinics, the health centers offered sessions with health coaches plus free classes ranging from nutrition and tai chi to yoga.