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UnitedHealthcare To Exit Federal Insurance Exchange In Most States

UnitedHealthcare, the nation’s largest health insurer, will discontinue offering plans on the federal Affordable Care Act insurance exchange to Illinois consumers in 2017. Tony Marusic, a local spokesman for UnitedHealthcare confirmed the departure but could not specifically say the reason behind its leaving the state.

Consumers in 27 counties will be affected by the departure of the Minnetonka, Minnesota-based insurer. According to the company officials, the insurer will operate only in a “handful” of insurance exchanges in 2017, down from 34 states this year. Chris Sloan, a senior manager at Avalere Health in an interview with The Daily Signal, said:

“I think the consensus has been that it’s not going to have a significant impact on consumers. Now, that depends on who you are as a consumer. But in states where they pull out, you’re going to have to switch plans and actively shop. When you go from two [insurers] to one, you notice.”

UnitedHealth Group, the parent company of UnitedHealth, gave signs last November that it was considering quitting most marketplaces due to the spiraling losses associated with the Obamacare plans.

In April, UnitedHealthcare announced its plans to leave almost all of the ACA exchanges because it was experiencing heavier-than-expected losses from covering a population that was sicker than it expected. Last week, the company said it lost $475 million last year from the Obamacare plans and was on target to lose $650 million in 2016.

Members from Illinois will be able to avail their benefits through the end of the year. The company’s group insurance business or Medicare plans will not be affected by the changes.

The insurer’s Harken Health subsidiary, which started offering ACA plans in Illinois and Georgia on a limited basis this year, will remain on the exchanges next year, according to the company. The broker site suggested that Harken will expand to Florida in 2017.

Nationally, 795,000 people enrolled in UnitedHealthcare exchange plans at the end of the first quarter, but the insurer didn’t provide numbers breaking down the total by state. According to Mark Farrah Associates, a data aggregator and web publisher of the healthcare industry, the insurer had almost 22,000 individual members in Illinois at the end of last year, less than 4% of the state’s market share.