Obamacare supporters got good news recently when UnitedHealth Group announced it wants to be a bigger player in the insurance exchanges. The country's largest private health insurer said it will increase its participation from five to 24 state exchanges when they open for enrollment on Nov. 15.
It will offer exchange plans for the first time in Florida, Illinois, Michigan and North Carolina.
“We think the second vintage will be better,” Stephen Hemsley, United's CEO, said on a call with investors this month. “The third vintage will be better after that.”
UnitedHealth officials said they expect to earn profits on their exchange business next year, though they cautioned the likely margin will be less than the 3% to 5% level they expect in the long run.
Like UnitedHealth, most publicly traded insurers took a cautious approach in 2014 to the exchanges established by the Patient Protection and Affordable Care Act. That's partly because they faced an enrollment pool that was unpredictable in terms of age and health status. In addition, the individual market has made up only a small portion of their total business. The notable exception was WellPoint, the Blue Cross and Blue Shield-affiliated company, which competed for exchange customers in all 14 states where it does business.