Yesterday UnitedHealth, the country’s largest insurer, decided to cease offering Affordable Care Act plans in Georgia and Arkansas. This decision comes several months after the insurance company predicted that it would lose over $1 billion because of participating in these exchanges. UnitedHealth makes up approximately 6% of the total Affordable Care Act marketplace, and it is the largest carrier of medical plans. As of last fall it had about 600,000 customers enrolled in plans through the exchanges.
This decision is not entirely unexpected. Back in November 2015, UnitedHealth CEO Stephen Hemsley stated that the insurer had reduced its revenue forecasts for its Affordable Care Act plans and that the company was reducing its marketing for the coming year of 2016. He also implied that his company was considering leaving the Affordable Care Act marketplace completely within two years. The Center for Medicare and Medicaid Services nevertheless stated that the exchanges offered a number of different health plans, and that all new markets have to undergo certain changes and adjustments.
While UnitedHealth has a limited presence in these exchanges, its decision to completely exit the exchanges is a warning sign. As we previously stated back in January, UnitedHealth’s withdrawal from the exchanges comes after most of the co-ops have failed and Anthem, Cigna, Aetna, and Humana have announced their proposed mergers. Should these mergers be approved, consumers looking for health insurance in the Affordable Care Act exchanges will have few choices. However, if the mergers are blocked, consumers will have substantially more options and competition in these new marketplaces.