Forecast Looks Poor for UnitedHealth Exchange Future

Last month, UnitedHealth insurance sounded optimistic about their prospects, yet on Thursday, United lowered its profit estimates due to losing $600 million from individual policies on the federal exchange market. The company stock immediately fell almost 6%, and they expect exchange-related losses to be 45 cents a share. They are considering pulling out of the exchange market for 2017 because they don’t want larger losses in a system that is not sustainable. This has put Obamacare’s future back into question.

United has been a reluctant participant in the exchange and has only sold a fraction of total exchange policies. They are scaling back marketing efforts for the current enrollment period. If United cannot break even by early 2016, they will leave the exchange market.

The insurance industry is frustrated with the exchanges and difficulty in getting new customers. Aetna is also losing money this year, but hopes to break even next year. Anthem is concerned that the enrollment is less than expected. Blue Cross is having a loss on the year, naming the exchange as the main reason. These other insurers are thinking about their future participation in the exchange.

The only insurance companies doing well in the exchange market are those that focus on the Medicaid population, whose policies are largely subsidized.

With open enrollment for 2016 now underway, premiums have risen significantly. The second-lowest price plans in the “silver” tier have increased an average of 7.5%, where other increases are much larger. Some insurers have stopped selling policies for next year, leaving people with fewer options. Other companies are limited the choice of physicians offered in their network.

Young, healthy individuals are opting to not make such a pricey purchase, which will drive premiums even higher in the future. The risk pool is full of sick people. To improve the exchange market, policy makers want to make it harder for consumers to sign up for insurance outside of the enrollment period window.

If you are searching for affordable medical care without insurance, with a high-deductible insurance policy, or need an out of network physician, contact MediBid for a cost savings of hundreds to thousands of dollars.
Abelson, Reed. “UnitedHealth Lowers Forecast, Blaming Affordable Care Act.” Business. The New York Times, 19 Nov 2015. Web. 22 Nov 2015.
Mathews, Anna Wilde and Armour, Stephanie. “Biggest Insurer Threatens to Abandon Health Law.” Business. The Wall Street Journal, 19 Nov 2015. Web. 22 Nov 2015.

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