Just as its CEO, Stephen Hemsley warned at the end of 2015, UnitedHealth Group Inc., the nation’s largest private insurer is planning to dump most of its Obamacare individual insurance plans in 2017.
UnitedHealth to Flee From Obamacare
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The insurer has been selling its plans in 34 states this year, up from 25 states last year. The company has 795, 000 customers from the exchanges, more than half of them new to UnitedHealth. The company expects about 650, 000 members by year end.
In February, the government reported that as of January 31, 2016 more than 12 million people had signed up for Obamacare-related insurance through HealthCare.gov or a state-based exchange. Previous government expectations had been for more than 20 million people.
In a prepared statement as part of the company’s first-quarters earnings report, Hemsley said the company will only remain in a handful of states next year. The company said it expects to lose $650 million on the exchange plans in 2016. In spite of that bad news, the company reported better-than-expected profits. Their stock rose 1.9% after the news.
The company has found that people who signed up for its insurance plans through an exchange are using a lot more healthcare services than anticipated. What’s worse is that healthy people have been dropping their coverage and sicker people buying in outside of the normal open enrollment period, meaning they signed up when they could after a life event like a marriage or the birth of a child.
As the 2016 open enrollment period on the exchanges got underway, UnitedHealth still had policies listed on them. But it cut its marketing as well as cut commissions paid to brokers, creating an incentive for the brokers trying to help people find insurance to go somewhere else.
Hemsley said that the shorter term, higher risk profile of the new members, as well as the smaller than expected enrollment, suggested UnitedHealth could not offer plans on a sustained basis.
Other large insurers like Aetna Inc. and Anthem Inc., also large players on the exchanges, said they will continue to sell exchange plans.
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This is a fascinating development. In my practice we've seen similar outcomes with the revised protocol. The key differentiator seems to be patient selection criteria. Has anyone else noticed the correlation with BMI thresholds?
Great point. I'd push back slightly on the conclusion, the sample size in the cited study is too small to draw population-level inferences. That said, the directional signal is compelling and worth a larger RCT.
We implemented a similar approach last year. Early results are promising but we're still gathering 12-month follow-up data. Happy to share our protocol if anyone is interested.
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