UnitedHealthcare Reducing Involvement In ACA Marketplaces

Date: April 25, 2016

Obamacare Expenses Said To Drive Insurer’s Decision To Back Out Of Health Insurance Exchanges

UnitedHealthcare has announced that it will reduce its participation in Obamacare marketplaces from 34 states to just a few in 2017. Currently there are about 795,000 consumers are covered by UnitedHealthcare’s Obamacare plans. The AP reported that UnitedHealthcare said it “will operate only in a ‘handful’ of health insurance exchanges” next year. The company “did not provide the anticipated details” in its first-quarter earnings announcement, but a spokesman “confirmed Nevada and Virginia would be among the states where it will retain a presence.” UnitedHealthcare has said over the past week that it will pull out of exchanges in Arkansas, Georgia, and Michigan. Bloomberg News reported that before UnitedHealthcare’s statement, the Obama administration “attempted to downplay any departures from UnitedHealth.” A Department of Health and Human Services spokesman said, “We have full confidence, based on data, that the marketplaces will continue to thrive for years ahead.” However, UnitedHealthcare is the largest health insurer in the US, making the impact of its announcement even more pronounced. Bloomberg noted that UnitedHealthcare began rolling out plans on the health insurance marketplaces in only four states in 2014. According to observers, “the decision is a clear signal of the troubles insurers face in making money in the marketplaces.”

What This Means For Small Businesses

Obamacare has been taking its toll on businesses large and small, including insurers themselves. The latest announcement from UnitedHealthcare is some of the strongest evidence yet that Obamacare makes bad business sense. Small businesses whose workers were covered by UnitedHealthcare on the insurance marketplace may be particularly affected, as they can hardly afford to replace dropped UnitedHealthcare coverage with increasingly-costly alternatives. More broadly, one insurer’s departure from the exchange may decrease competition, further driving up healthcare costs across the board.

Additional Reading

The Minneapolis Star Tribune also covered UnitedHealthcare’s plans to withdraw from the marketplace, specifically in Iowa.

Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.

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