Dive Brief:
- In its 2015 earnings update, UnitedHealth Group says it will re-evaluate its future participation in the insurance marketplaces set up by the ACA.
- “In recent weeks, growth expectations for individual exchange participation have tempered industrywide, 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,” said Stephen J. Hemsley, chief executive officer of UnitedHealth Group.
- The payer stated it expects $425 million or $0.26 per share reduction in fourth quarter 2015 earnings driven by 2015 and 2016 individual exchange product pressure.
Dive Insight:
While the company posted a 27% increase in third quarter revenue, as reported by The Wall Street Journal, the company expects large losses through the ACA’s exchanges, marking “the most prominent signal so far of health insurers’ struggles with the health laws marketplaces.”
According to the company’s release, the revised expectations for 2015 reflect a “continuing deterioration in individual exchange-compliant product performance.”
The Wall Street Journal notes the company is parsing back marketing efforts related to the individual exchange plans in 2016, adding, “The company is evaluating the viability of the insurance exchange product segment and will determine during the first half of 2016 to what extent it can continue to serve the public exchange markets in 2017.”