Good-bye United Health Care – Insurer Flees Most Obamacare Markets
Stephen Hemsley, CEO of United Healthcare announced yesterday that the company will exit most markets and that by next year the company would have a presence in “only a handful of states.”
Previously, the nation’s largest health insurer said it lost big in the marketplace in 2015. According to a spokesperson for the carrier, this year losses are estimated to be $650 million; even more than last year’s loss of $475 million.
While this news was not unexpected, the uncertainty over the shrinking competition in the marketplace continues as the mergers of UHC rivals Aetna and Humana, and Cigna and Anthem continue to move forward. A crucial piece of the Obamacare has been state exchanges but carriers such as UHC are no longer willing to take the risk of additional losses.
Most analysts expect only a modest effect of the UHC withdrawal since the company did not offer low premium plans in the marketplaces, however, the effects would vary state to state. According to an analysis published this week by the Kaiser Family Foundation, the biggest effect will be in consumer choice.
Who was happy over the news? Wall Street, where stock for United Healthcare rose after the exit announcement.