UnitedHealth Group has already ditched its Affordable Care Act health plans in three states, but a new analysis shows that even if the health insurance conglomerate exited all of its markets, the negative impact to competition and premium prices would be limited to confined areas.
If UnitedHealth left all of its ACA marketplaces, 29% of counties where UnitedHealth has a presence would go from having two competing insurers to only one, according to a report from the nonpartisan Kaiser Family Foundation released Monday. However, UnitedHealth offers many ACA exchange plans with higher premium prices. The insurer had the lowest or second-lowest silver plan in only 35% of its counties for 2016 coverage.
“Even when it did price relatively low, it was often not significantly lower than its nearest competitors,” the Kaiser Family Foundation authors wrote. “As a result, the effect of a United withdrawal nationally would be modest.”
UnitedHealth has fully exited the ACA's exchanges in Arkansas and Michigan thus far and partially pulled out of Georgia. Subsidiary Harken Health still sells ACA plans in Georgia. The company expects to lose $1 billion on its 2015 and 2016 exchange plans and will make a decision this year whether it will pull the plug on its ACA business by 2017.
Some analysts and ACA critics have sounded the alarms over the prospect of the nation's largest health insurance company bailing on a major pillar of the ACA. The exchanges are viewed as the means for people to access affordable coverage, and critics have said losing a big-name insurer such as UnitedHealth would call into question the exchanges' reputation and stability.
However, UnitedHealth is a small player on the exchanges. It barely participated during the inaugural sign-up period in 2014, selling ACA plans in only four states at the time. UnitedHealth operated in 34 states for 2016.
UnitedHealth also ended 2015 with 650,000 individual ACA-compliant health plan members, 500,000 of which bought plans on the state and federal exchanges. That represented only 6% of last year's exchange membership. Blue Cross and Blue Shield plans have invested more resources into the exchanges, although they, too, are losing a lot of money. Large Medicaid-centric plans, however, have had no problems making a profit on their ACA plans.
The Kaiser Family Foundation analysis showed the 2016 monthly premium of the benchmark silver plan—a popular option that is tied to how premium subsidies are paid out—would have been $25 to $100 higher for a 40-year-old in 304 of the country's 3,142 counties, or about 10%, if UnitedHealth had never sold plans there. Nationally, the average price of the benchmark silver plan would've been 1% higher this year.
The federal government has brushed off UnitedHealth's marketplace posturing. “As with any new market, we expect changes and adjustments in the early years with issuers both entering and exiting states,” HHS spokesman Ben Wakana said in a statement. “The marketplace is a reliable source of coverage for millions of Americans with a robust number of plan choices. We have full confidence, based on data, that the marketplaces will continue to thrive for years ahead.”
UnitedHealth will disclose its first-quarter financials Tuesday morning.