UnitedHealth Group may withdraw from Obamacare exchanges

The shares fell 6.6 percent to $109.5 in trading before USA exchanges opened.

“Co-operatives have failed and market data has signaled higher risks and more difficulties while our own claims experience has deteriorated, so we are taking this proactive step”, he explained. It now expects earnings of about $6 per share.

UnitedHealth announced November 19, 2015, it is chopping its 2015 earnings forecast, citing hits it expects to take from new public insurance exchanges. About 9.9 million people who had insurance through the U.S.- and state-run insurance markets as of June 30.

Insurer Kaiser Permanente, which offers coverage in eight states and Washington, D.C., said Thursday it remains committed to the ACA exchanges.

Plans sold through Florida’s exchange by UnitedHealth are set to rise an average of 18 percent, according to CNN Money.

UnitedHealth continues to make hefty profits in those other insurance segments, and its business model, which emphasizes breadth and size, actually makes it a poor fit for selling directly to individuals.

Aetna CEO Mark Bertoloni said last month that despite plans to withdraw from exchanges in two states, while adding plans in one state, Aetna views the exchanges “as a long-term market potential”. “While there have been challenges at times, we believe at the end of the day they are causing healthy disruption, and are forcing the healthcare industry to respond better to consumer needs”, Tyson said. It is still a smaller player on these markets than Anthem, Aetna and Humana Inc. UnitedHealth’s comments are “not indicative of the marketplace’s strength and viability,”he said”.

UnitedHealth Group “is insulated in part from the exchange issue because it entered late and in a more limited way than peers and because it has a more diversified business model within benefits and across services than peers”, wrote Sheryl Skolnick, an analyst with Mizuho Securities US, in a note to investors Thursday.

The company’s exchange enrollment this year came to only about 540,000, out of total exchange enrollments of more than 9 million.

The year 2017 is significant for insurers, because that’s the year when several programs created to mitigate risk for insurers through federal backstops go away.

UnitedHealth warned investors that it would reap $425 million less in revenue during the fourth quarter than it had previously expected, translating into 26 cents in earnings per share in losses attributed to a worse outlook for the quarter and all of 2016.

An analysis by the Robert Wood Johnson Foundation found that a number of insurers are cutting preferred-provider-organization plans, which tend to have more open access to health-care providers.

“All the other big insurers are signaling the same problems”, said Ana Gupte, an analyst with Leerink Partners LLC.

The significance of this news, from the nation’s largest insurance company, can not be overstated.

David S. Wichmann, UnitedHealth’s president and chief financial officer, said then that the company expected the health-law marketplaces “to develop and mature over time into a strong, viable growth market for us”.

And then there’s Marilyn Tavenner, the former head of CMS, who led the Administration’s efforts to enact Obamacare and was responsible for HealthCare.gov. In July 2015, Tavenner became the top lobbyist for the nation’s health insurance industry as the new president and CEO of America’s Health Insurance Plans (AHIP).

“Fundamentally, the carriers have to be allowed to sell health plans that people want to buy”, Laszewksi said. Already, the Minnetonka, Minnesota, insurer is halting campaigns to market insurance plans now listed for sale to cover patients in 2016. The firm also noted it has “pulled back” on marketing plans for next year.

Consumers have criticized plans for high out-of-pocket deductibles that must be paid before coverage kicks in, as well as steep increases in monthly premiums from year to year.