UnitedHealth Group, one of the nation’s largest and most established health insurers, recently announced an exit in 2017 from most of the 34 state Marketplaces where they offer individual health insurance plans. 
Background
Since the Affordable Care Act (“Obamacare”) Marketplaces opened in 2014, all eyes have been on UnitedHealth Group when they were noticeably absent from the new exchanges. In 2015 and 2016, however, their presence grew as they entered the exchanges in 34 states.
United’s recent announcement has drawn significant media and industry attention, bringing up questions about the future of the Marketplaces and if other insurers would follow suit.
To help you understand what this means for coverage and plan options in 2017, this article breaks down four things to know about UnitedHealth Group’s planned exit.
1. A Financial Decision
According to UnitedHealth Group’s announcement, the decision is financially based. UnitedHealth Group reported it expects to lose $650 million in the exchanges in 2016.
2. On Average, Insurance Premiums Will Not Change
According to a recent analysis by Kaiser Family Foundation (KFF), UnitedHealth Group's participation on the Marketplaces has had a relatively small effect on premiums. For example, UnitedHealth Group was less likely to offer one of the lowest-cost silver plans, where the bulk of enrollees tend to sign up. As such, their exit should not largely impact premiums.
3. Impact Significant in Some Rural and Southern States
The KFF analysis found if UnitedHealth Group were to drop out of all the states, 1.1 million people in the exchanges would have just one option for an insurer, provided no other insurers rushed in to fill the gap. The impact would be especially significant in certain rural and Southern states where insurer competition is currently low.
4. Other Insurers May - or May Not - Follow Suit
UnitedHealth Group’s exit may be sign of the financial troubles insurers face making money in the Marketplaces. At the same time, UnitedHealth Group has taken a conservative, low-risk approach to the Marketplaces and other companies may - or may not - follow suit. As the Department of Health and Human Services noted in a recent press release, the number of issuers per state has grown year-over-year and consumers have increasing plan choices, despite the exiting of some insurers.
To read a detailed analysis, see Kaiser Family Foundation’s recent article.
Conclusion
UnitedHealth Group’s recent announcement to exit the majority of public individual health insurance Marketplaces is an indicator insurance companies are still trying to figure out how to make money in the Marketplaces. For consumers who purchase coverage through the exchanges, the impact could be minimal except for consumers in niche markets where insurer competition is already low.
What questions do you have about United Health Group’s recent announcement, or about Obamacare in 2017? Join the discussion with a comment or question below.
