UnitedHealth sees further losses for Obamacare insurance
By Caroline Humer
(Reuters) - UnitedHealth Group Inc (UNH.N: Quote) is still losing money on the individual insurance business created under U.S. President Barack Obama's national healthcare reform law due to customers' high medical costs, the company said on Tuesday.
The largest U.S. health insurer said that it was booking $200 million in losses in the second quarter to cover higher-than-anticipated use of medical services by customers this year. UnitedHealth and other insurers have blamed those costs for their losses from the exchange business.
The company said it expected the program, often called Obamacare, to reduce 2016 earnings by about $850 million, up from $475 million in 2015.
Next year, it will exit most of the two dozen states where it sells individual insurance on the exchanges but still has plans to sell in Nevada, New York and Virginia.
"We do not expect any meaningful financial exposure on 2017 business from the three or fewer exchange markets where we currently plan to remain," Chief Executive Officer Stephen Hemsley said on a conference call with analysts to discuss second-quarter financial results.
Individual exchange customers this year have more severe chronic conditions, such as diabetes, chronic obstructive pulmonary disease and HIV, and attrition has been lower than expected, UnitedHealth said. It expects to end 2016 with 750,000 exchange members.
The company said its other businesses, including pharmacy benefit management and the technology and consulting divisions, were strong, and it reported higher-than-expected earnings and revenue for the second quarter.
UnitedHealth, which also sells employer-based insurance as well as Medicare and Medicaid, raised the low end of its full-year profit outlook to $7.80 per share from $7.75 and kept the high end at $7.95. Continued...