America’ largest health insurer pulls back from ObamaCare program, as it fears more than $1 billion losses
UnitedHealthcare CEO Stephen Hemsley has announced that the health insurance company cannot cover market’s needs due to high risk imposed by its customers.
Despite company’s expansion plans, UnitedHealth Group Inc. expects $650 million in losses in 2016, after already losing $475 million in 2015. Moreover, the company decided to pull out of states like Arkansas, Georgia and Michigan in 2017.
“We continue to remain an advocate for more stable and sustainable approaches to serving this market,” Hemsley commented.
The Affordable Care Act program aimed to expand insurance coverage by focusing on state-based exchanges, but insurers were obliged to face a high-risk market due to boosting rates of chronic disease, such as hypertension, diabetes, depression, coronary artery disease, HIV and Hepatitis C when compared to the period before ObamaCare.
According to a Kaiser Family Foundation analysis, “the effect on insurer competition could be significant in some markets – particularly in rural areas and southern states. If United were to leave the exchange market overall, 1.8 million Marketplace enrollees would be left with two insurers, and another 1.1 million would be left with one insurer as a result of the withdrawal.”
Despite families not receiving better health care under ObamaCare, UnitedHealthcare currently exchanges services in 34 states and covers 795.000 people.
Whether or not the company will continue its participation in the program after 2016 it remains to be decided. Experts forecast other insurers will exit their exchange participation in 2017 due to struggling with enormous business costs.