UnitedHealth Group, the country’s largest insurer, will continue to offer insurance coverage through Affordable Care Act exchanges in only a “handful” of states, according to CEO Stephen Hemsley.
Approximately 795,000 UnitedHealth customers bought plans for 2016 through the exchanges, representing a small portion of the 13 million people overall who purchased their coverage this way. The Department of Health and Human Services noted that in many states UnitedHealth’s plans were more costly than those of other insurers.
UnitedHealth said it anticipates losing $650 million this year on exchange plans, partially because those who bought coverage through the exchanges have poorer health than expected. Nonetheless, UnitedHealth still reported $44.5 billion in revenue for the first quarter, a 25 percent increase as compared with last year’s first quarter, and the company’s profits were up 14 percent from the year-earlier period, at $1.6 billion.
The insurer’s operating margin for the first quarter was down from a year ago (5.2 percent vs. 5.8 percent, respectively), in part because of the company’s poor performance in the exchanges.
Individuals who purchased a 2016 UnitedHealth plan through one of the state exchanges will be covered for the duration of their policy, which for most is through the end of this year.
The Kaiser Family Foundation pointed out that UnitedHealth Group participated in the exchanges in only four states in 2014, but expanded to 23 states in 2015 and 34 states in 2016.