Earnings report may reveal UnitedHealth's exchange plans

When UnitedHealth Group kicks off the third-quarter earnings season for insurers Thursday, reform watchers will be eager to hear more from its executives about their intentions for the 2015 Obamacare open enrollment. The Minnetonka, Minn.-based insurer has indicated it intends to more than double its exchange footprint, competing for customers in 24 states after its cautious entry into the exchange business this year. A recent analysis by J.P. Morgan estimated UnitedHealth will attract 450,000 exchange enrollees.

Aetna, Cigna and Humana are modestly expanding their exchange participation for 2015. Those insurers will follow with third-quarter earnings reports in the coming weeks.

Another area to watch in the insurers' reports is Medicare Advantage, as Medicare's open enrollment starts Wednesday. Plans face pressure to achieve at least four stars under the CMS' five-star quality rating system, or forfeit their bonus payments. Those extra bucks are crucial at a time of thinning profits for Advantage plans.

Humana is setting the pace in star ratings, with 91% of its Medicare beneficiaries enrolled in plans earning four stars or better, according to J.P. Morgan. UnitedHealth boosted its share of members in plans with at least four stars from 22% to 33%, while WellPoint had only 9% of Advantage members enrolled in plans that qualify for bonuses.

The Advantage market continues to grow, having signed up 4.6 million more beneficiaries since 2010. Insurers continue to push back against Advantage rate cuts. The program “is too large and too important for it to be weakened by insufficient funding,” United Health Group CEO Stephen Hemsley cautioned at a Washington event last week.

Follow Paul Demko on Twitter: @MHPDemko