During a conference call with analysts in mid-April, Stephen Hemsley, CEO of UnitedHealth, revealed his company "will remain in only a handful of states" next year.
That move is sure to affect a lot of Americans. How many? It’s hard to say until the Minnesota-based insurer clarifies which states it will withdraw from and which it will continue to serve.
All that’s known now is it will drop this form of coverage in at least 16 (of 34) states by the end of 2016. Some of the states currently on the chopping block:
As for where UnitedHealth will retain a presence: New York, Nevada, and Virginia are the only sure bets at the moment.
Why UnitedHealth is Making this Move
Although this is big news, it’s not all that surprising. Hemsley announced last fall that the company was scaling back its Obamacare marketing efforts. He also said UnitedHealth would evaluate the viability of its exchange plans in the first half of 2016.
Perhaps more telling was that the insurer revealed it lost $475 million via the Affordable Care Act exchanges in 2015 — and that it might lose $500 million more this year. Recently, it upped the latter figure to $650 million.
All of the above likely helped UnitedHealth decide to make this move. Also playing a role: “the smaller overall market size and shorter term, higher-risk profile within this market segment,” Hemsley said while addressing analysts.
Who Is Most Likely to Be Affected
How many people will UnitedHealth’s withdrawal from the public exchanges impact? Some suggest the number could be in the millions.
At the very least, it’s sure to be in the hundreds of thousands. According to company president and chief financial officer, David Wichmann, UnitedHealth served nearly 800,000 people via the exchanges through the end of the first quarter. He expects that to drop to 650,000 or so by December.
It will affect others too, of course. In fact, the Kaiser Family Foundation recently reported that almost two million consumers might go from being able to choose from three insurers to two after UnitedHealth’s exchange exodus. And just over a million may go from having a choice of two insurers to one.
The bulk of those million or two consumers live in the Midwest and South. Specifically, Kaiser said this changeup could “severely limit competition in parts or all of about 10 states.” A few examples:
- Kansas and Oklahoma would have only one health insurer if another company doesn’t replace UnitedHealth in those exchanges.
- In Mississippi, enrollees in 50 of 82 counties would drop to just a single exchange option. People living in the state’s other 32 counties would continue to have two choices for this coverage.
- A similar situation could occur in Alabama. Two-thirds of its residents would see their exchange choices decrease from two insurance companies to one. The rest would retain their two options.
People in other parts of the country probably will see a more “modest” impact on their premiums and plan options, according to the Kaiser report.
A Note for People Looking to Save Money on Health Plans
Something to keep in mind here, especially if you live in any of the areas mentioned above, is that the company’s plans aren’t often the lowest-cost options.
For instance, Kaiser pointed out that 95 percent of Florida, Illinois, and Ohio residents live in a county where they have access to plans cheaper than UnitedHealth’s.
If you’re curious to know which of the state exchanges have proven to be the best and the worst for the consumers who use them so far, read our article, “Best and Worst Health Insurance Exchanges.”
Two other articles you should find both interesting and helpful: “10 Common Health Insurance Mistakes” and “11 Questions That Will Help You Pick the Right Health Insurance Plan.”