Competition suffers most if UnitedHealthcare exits Obamacare next year
If UnitedHealthcare follows through on its threat to quit the health insurance marketplaces in 2017, more than 1 million consumers would be left with a single health plan option, forecasted an analysis released Monday.
A UnitedHealthcare pullout would be felt most in several states, generally in the South and Midwest, where consumers would be left with little choice of plans, the Kaiser Family Foundation reported. (KHN is an editorially independent program of the foundation.)
In most of the 34 states where United operates this year, though, the effect would be modest for premiums and the number of plan options, Kaiser said.
Kaiser’s analysis was made public a day before UnitedHealth Group, the insurer’s parent, is expected to announce 2017 plans for the Affordable Care Act’s marketplaces that provide coverage to individuals who shop for their own health insurance.
In the past week, state officials confirmed UnitedHealth was withdrawing from marketplaces in Arkansas and Michigan and partially leaving Georgia. In Atlanta and Chicago, a new UnitedHealthcare subsidiary, Harken Health, began operating this year and is expected to remain.
Last year, UnitedHealthcare said it was losing hundreds of millions of dollars on the Obamacare plans and would decide its future participation by mid-2016. Health plans need to begin notifying states by May whether they plan to sell in marketplaces next year.
More than one in four counties where UnitedHealthcare participates nationally would see a drop from two insurers to one if the company exits and isn’t replaced by a new entrant, and a similar number would go from having three insurers to two, the Kaiser analysis found.
In total, 1.8 million enrollees would go from having a choice of three insurers to two, and another 1.1 million would go from having a choice of two insurers to one, the report said.
A UnitedHealth withdrawal would leave marketplace enrollees in Kansas and Oklahoma with only one insurer if another company does not move in, Kaiser said.
Its analysis cited the potential impact in other states if UnitedHealthcare drops out:
Nationally, UnitedHealthcare’s participation on the exchanges had a relatively small effect on average premiums, based on Kaiser’s analysis of 2016 insurer premiums.
The company was less likely to offer one of the lowest-cost silver plans, where most enrollees sign up. When it did offer a low-cost option, its pricing was often close to its competitors. As a result, the weighted average premium for a benchmark silver-level plan would have been about 1 percent higher had United not participated in 2016. Federal subsidies in the marketplaces are based on the second-lowest silver premium.
Benjamin Wakana, a spokesman for the Centers for Medicare & Medicaid Services, said the government expects insurers to make adjustments in entering and exiting states.
“The marketplace should be judged by the choices it offers consumers, not the decisions of any one issuer. That data shows that the future of the marketplace remains strong.”