The extent of UnitedHealthcare’s exit from the nation’s health insurance exchanges became clear Wednesday as the company confirmed it will compete in government-run marketplaces for just three states next year.
Currently, United competes on the exchanges for 34 states, but is retreating due to large financial losses.
United signaled late last year that a pullback was coming, and updated the commentary in April by saying the insurer would remain in just a “handful” of states.
On Wednesday, a United spokesman confirmed the insurer plans to compete again next year only on the exchanges in Nevada, New York and Virginia, meaning the company won’t be back in 31 other states.
“The individual on-exchange products filed for 2017, listed above, may not be available in all service areas within the states referenced,” the insurer said in a notice posted to a website for brokers.
The exchanges are an option for individuals and families to obtain health insurance outside of employer groups and government programs. The online marketplaces were launched under the federal Affordable Care Act, which requires almost all Americans to have health insurance or pay a tax penalty.
UnitedHealthcare never sold policies through Minnesota’s MNsure exchange, but the insurer currently is an option for exchange shoppers in the neighboring states of Iowa and Wisconsin.
One carrier leaving so many state markets isn’t necessarily a huge deal in isolation, since most cases consumers will still have choices, said Robert Laszewski, a health care consultant in Virginia. But United’s actions point to broader problems with the exchanges, Laszewski said, including financial losses for carriers, rising premiums for consumers and many potential subscribers opting out of coverage.
“If you look at in the broader sense, [it’s] just another example of the Obamacare exchanges having terrible results,” Laszewski said.
But Cynthia Cox, a researcher with the Kaiser Family Foundation, said she sees United’s moves as a response to its own difficult experience on the exchanges, rather than a statement about the overall health of the government-run marketplaces.
Cox noted that United’s independent subsidiary Harken Health will continue in Georgia and Illinois, while expanding to Florida, and suggested the insurer might simply be experimenting with a new strategy.
“It doesn’t seem like other insurance companies are following suit,” she said. “Some other insurers have found ways to be profitable on the exchanges, or at least have had better financial outcomes than United did.”
Harken Health is not a statewide option, but instead is focused on the Atlanta, Chicago and Miami markets. The insurer offers zero-copay access to primary care, plus free health and wellness services, at a limited number of health centers that are operated by Harken.
With the extent of United’s pullback now clear, attention is turning to announcements from carriers and states about proposed rate increases for 2017. The Blue Cross and Blue Shield plan for Texas, for example, is seeking an average rate increase of 59 percent for about 600,000 subscribers, according to a posting on a federal website.
Late last month, the consulting firm Avalere published a report that found proposed 2017 rates are exceeding those for 2016, although the magnitude of possible jumps varies. In Washington, insurers on average are seeking increases of 5 percent on “silver” plans available on that state’s health exchange; in Vermont, the average proposed increase for silver plans is 44 percent, according to Avalere.
Requests for large rate increases are subject to review by regulators. Proposed rates for Minnesota’s individual market aren’t scheduled for release until August.
Christopher Snowbeck • 612-673-4744