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UnitedHealth Announces Intent to Leave Obamacare Markets

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UnitedHealth Announces Intent to Leave Obamacare Markets

Healthcare giant UnitedHealth, who serves over 100 million customers, has announced their intent to pull out of Obamacare markets in dozens of states, citing the costs of remaining in the marketplace. That would leave United Health active in only 4 states nationwide, and leaving more than a million people on the marketplaces only one provider on the Obamacare Exchanges. The move is another major blow to the law, as the country is tens of millions of the short of the benchmarks 


The decision is a sequel to a report from the healthcare giant late last year that that it expects to lose $650 million in the exchanges in 2017. Most companies taking part in the individual exchanges lose money there. Causes are widespread, but marketplace consumers are significantly more expensive to insure than those with employer-based insurance. 


United's announcement comes as other insurers have indicated concern over how they are faring in the marketplaces created by health reform, as well. Last year, the Blue Cross Blue Shield Association released a report indicating that new members who enrolled in individual plans used more medical services of all kinds and accounted for health care spending 22 percent higher than people with employer-based insurance in 2015. With laws in place allowing healthcare companies to raise rates only after prior year data is available, there is an expectation that Blue Cross and others will begin to raise prices 

Some economists warn that this is a natural process of the still-relatively young Obamacare marketplaces, where entrances and exits will occur over time as the market evolves. However, UnitedHealth's decision to leave is being seen by market experts as a warning that the exchanges should expect turmoil in the coming years. 

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