Nation’s largest insurer may exit health care exchange

Kaiser covers about 450,000 people in nine exchanges, and a spokeswoman said they are confident that the business is financially stable.

In a sharp reversal of its previously optimistic projections, UnitedHealth suspended marketing of its Obamacare exchange plans for 2016 – which the company has already committed to offer – to limit its exposure to additional losses. Insurers’ participation in the health care exchanges is optional.

Shares of Molina and the other insurers all plunged Thursday after UnitedHealth Group cut its 2015 forecast, reported deep losses from its exchange business and said it will decide next year whether it wants to continue in that market. “We can’t really subsidize a marketplace that doesn’t appear at the moment to be sustaining itself”, Hemsley said.

U.S. officials rushed to defend President Barack Obama’s signature health care reforms Friday after the country’s largest insurer said it might pull out due to large financial losses. That is, unless you’re one of the millions of people who has to shop for health insurance -again-in which case, ’tis the season to be stressed out.

“Every day, tens of thousands more Americans turn to the Health Insurance Marketplace for health coverage and even more return to the Marketplace for another year”, U.S. Department of Health and Human Services spokesman Ben Wakana said in a statement. The Obama administration has been loath to reopen the law with Congress, given that many Republicans vow to repeal it. But the White House has to acknowledge that changes are needed now.

Shares of Aetna Inc. climbed 4 percent, or $4.06 to $104.01 in midday trading Friday, while Anthem Inc. stock was up more than 2 percent, or $2.83, to $130.67.

The nation’s largest health insurer UnitedHealth said Thursday it is having serious doubts about participating in Obamacare.

Initially, UnitedHealthcare had been reluctant to enter the online health insurance marketplace, holding out in the first year of the exchanges, 2014, before joining in 2015. People who purchase insurance through the public exchanges are typically heavy users of their plans, draining insurers’ profits, analysts say.

The earnings pressure is driven by projected losses on individual exchange-compliant products related to the 2015 and 2016 policy years, the company said.

UnitedHealth’s shares slumped 5.7 percent to $110.63 on Thursday. The average rebate per family was $129, according to the agency.

“We continue to be pleased with the growth and overall performance of our company outside of the individual exchange products and look forward to strong, positive and broad- based earnings growth across our enterprise in 2016”, it said.

A total of 9 million Americans are enrolled in an exchange through one company or another.

Another benefit to these plans is that the money reimbursed to employees is tax-free, and employees are allowed to tap into the tax credits given by the federal government for purchasing insurance. Almost 1.1 million people have selected plans so far for 2016.

The insurer said as recently as last month that it expects the exchanges to mature into a viable growth market. Hemsley said that since then, the enrollment picture has become worse, and it has become clearer that the medical costs of new customers were unsustainable.

The earnings affirmations echo that of Centene Corp and Molina Healthcare Inc.

Insurers in many markets have struggled to find the right mix of healthy customers to balance the sicker ones since the exchanges opened for business in the fall of 2013.