The nation’s largest health insurer, fearing massive financial losses, announced Tuesday that it plans to pull back from ObamaCare in a big way and cut its participation in the program’s insurance exchanges to just a handful of states next year – in the latest sign of instability in the marketplace under the law.
UnitedHealth CEO Stephen Hemsley said the company expects losses from its exchange business to total more than $1 billion for this year and last.
Despite the company expanding to nearly three dozen state exchanges for this year, Hemsley said the company cannot continue to broadly serve the market created by the Affordable Care Act’s coverage expansion due partly to the higher risk that comes with its customers.
UnitedHealth Group Inc. said it now expects to lose $650 million this year on its exchange business, up from its previous projection for $525 million. The insurer lost $475 million in 2015, a spokesman said.
UnitedHealth has already decided to pull out of Arkansas, Georgia and Michigan in 2017, and Hemsley told analysts during a Tuesday morning conference call that his company does not want to take the financial risk from the exchanges into 2017.