UnitedHealth may exit Obamacare individual exchanges

Thu Nov 19, 2015 6:29pm EST
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By Caroline Humer

(Reuters) - UnitedHealth Group Inc said it may exit the individual insurance exchanges created under U.S. President Barack Obama's healthcare law, raising new questions about the long-term sustainability of a key Obamacare program.

The largest U.S. health insurer said weak enrollment and high medical costs for exchange members were taking too big a toll on its performance. It will evaluate during the first half of next year whether it will offer Obamacare plans in 2017.

Rivals Aetna Inc and Anthem Inc said last month that they were seeing too few people enroll, but have not said they were considering exiting the business.

"We cannot sustain these losses," UnitedHealth Chief Executive Stephen Hemsley said during a conference call with investors. "We can't really subsidize a marketplace that doesn't appear at the moment to be sustaining itself."

A deterioration in the exchanges in the midst of the 2016 election campaign could give ammunition to Republican candidates opposed to the health care law. Democrats could also face pressure if UnitedHealth and other players depart the exchanges because less competition could mean higher insurance premiums.

The U.S. government said the exchanges were growing and giving millions of Americans access to affordable insurance. Enrollment for 2016 opened earlier this month.

"We continue to see more people signing up for health insurance and more issuers entering the marketplaces," U.S. Department of Health and Human Services spokesman Ben Wakana said in email. "Today’s statement by one issuer is not indicative of the marketplace’s strength and viability."

UnitedHealth shares fell 5.5 percent on Thursday, while Aetna lost 7.2 percent and Anthem dropped 6.4 percent. Shares of hospital operators, which had benefited in recent years from an increase in insured patients, also fell, with HCA Holdings Inc down 5.9 percent and Community Health Systems down 8.5 percent.   Continued...

UnitedHealth Chief Executive Officer Stephen Hemsley takes part in a panel discussion   in Beverly Hills, California, in this file photo taken May 1, 2012.  REUTERS/Danny Moloshok/Files