Dive Brief:
- Harken Health, an experimental subsidiary of UnitedHealthcare, announced last week that it's pulling out of its two ACA markets of Chicago and Atlanta for 2017. It had also announced in August that it was cancelling plans to expand its business to sell to Florida's Miami and Fort Lauderdale markets in 2017.
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The start-up insurer had only begun selling individual and group plans--both on and off the exchange--in Chicago and Atlanta in 2016 and was said to have a total of approximately 35,000 members. It said it will still sell individual plans off the exchange, where customers would be unable to apply government subsidies.
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Harken's departure follows major ACA business cutbacks from numerous other insurers, including that of its parent company, UnitedHealthcare.
Dive Insight:
The move does signal a significant failure, however, for Harken's experiment with a model in which it offered free, unlimited primary care and behavioral visits at its own staff-run clinics.
While Harken did not discuss the specific details around its departure, it struggled financially like many other insurers, racking up losses of nearly $70 million during the first six months of 2016, Modern Healthcare reported. One critic suggested the plan was not well enough marketed to agents and brokers, that it offered too few clinic locations, and that few insurance customers were swayed to give up their current providers.
Harken did note that it has replaced its founding chief executive Tom Vanderheyden, with Stevan Garcia.
Harken's experience is akin to that of Oscar, another startup with an experimental model, that has also had to pull back its ACA business and adjust its strategy for 2017.