UnitedHealth To Stop Selling Obamacare Coverage In California

UnitedHealth Group Inc. told brokers that it has filed paperwork to offer plans in just six states’ health-law marketplaces next year, providing the most complete picture so far of its previously announced widespread withdrawal.

The biggest U.S. health insurer said in April that it would pull out of all but a handful of the 34 states where it was selling the Affordable Care Act exchange plans, in the wake of mounting losses in that business.

Since then, the insurer’s 2017 exchange decisions have been emerging piecemeal as various state regulators disclosed that UnitedHealth wouldn’t be in their exchanges next year.

Tuesday, California officials became the latest to say UnitedHealth was leaving, when a spokesman for the Covered California exchange confirmed that the insurer wouldn’t participate in 2017.

  • The carrier also told brokers that during the next few weeks it would begin informing consumers enrolled in its exchange plans in states where it will pull out. Existing plans are effective through the end of 2016, and consumers can switch to different insurers during the fall’s open enrollment period.

In a statement Tuesday, UnitedHealth said “the smaller overall market size and shorter term, higher risk profile within this market segment continue to suggest we cannot broadly serve it on an effective and sustained basis.” But it said the company is “an advocate for more stable and sustainable approaches to serving exchange markets and those who rely on it for care.”

  • Overall, insurers’ approach to the exchanges for next year is mixed, in the wake of financial results that have been disappointing for many companies. Several insurers, including state Blue Cross Blue Shield plans, have reported similar challenges in recent months. And more than a dozen nonprofit insurance cooperatives created through the law have closed because they were overwhelmed by medical claims they couldn’t afford.

Many other insurers are sticking with the new marketplaces, though state filings have shown that several are seeking significant rate increases for next year.

  • Many consumer groups welcomed UnitedHealth’s arrival in Covered California in order to give people more choice and inject more competition into the market. The top insurers in the exchange, led by Blue Shield of California and Anthem Inc., control more than 90% of Covered California enrollment.

The state exchange had limited UnitedHealth to selling exchange plans in several smaller markets for 2016 because it didn’t participate the first two years

*Modified from online articles from WSJ.com, LAtimes.com, CNNmoney.com, Townhall.com, and other online data sources.

 

 

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