UnitedHealthcare plans to expand its footprint on the Affordable Care Act exchanges next year after exiting the marketplace in all but a handful of states in 2017.
The insurer filed an application to sell individual plans in Maryland in 2021, Governor Larry Hogan said Tuesday. Its entrance would inject more competition into the state's ACA marketplace, where two insurers are selling plans.
UnitedHealthcare hasn't yet said where else it will sell exchange plans next year but has hinted that its expansion may not be limited to Maryland.
"As the exchanges have matured and stabilized, we intend to offer exchange plans in those states where we can provide an efficient network and competitive product capable of driving sustainable value for consumers and our state and federal partners," a UnitedHealthcare spokesman said in an email.
The spokesman declined to say what other states the company may enter but said it would "evaluate opportunities on a market-by-market basis."
UnitedHealthcare sold exchange plans in 34 states in 2016 but withdrew from nearly all of them after losing hundreds of millions of dollars on the plans. Since then, it has continued to sell exchange plans in only New York, Nevada and Massachusetts.
Other large insurers, including Aetna and Humana, also exited the exchanges during the volatile early years, when insurers lacked information to set accurate premiums and ended up pricing too low.
At the time of its exit, and in the years after, UnitedHealth Group executives criticized the ACA exchanges as unsustainable. But since then, the ACA marketplace has stabilized and insurers have turned substantial profits. Average silver plan premiums decreased in 2019 and 2020. Competition on the exchanges has also improved as more insurers filed to sell plans.
UnitedHealth seems to have changed its mind about the exchanges' viability.
"We also believe that an exchange product can serve as an important part of a broad portfolio of public and private options capable of providing universal coverage to all Americans," the spokesman said.
The COVID-19 pandemic and related job losses could drive higher enrollment in the exchanges and Medicaid as the newly uninsured search for new forms of healthcare coverage. Some states have launched special enrollment periods in response to the crisis to allow the uninsured to sign up for a health plan, and early reports show the uninsured are taking advantage of the opportunity.
During a first-quarter earnings call in April, UnitedHealthcare CEO Dirk McMahon told analysts the company had been mulling participating in more exchanges even before the COVID-19 pandemic, but would have more information about its intentions during the second-quarter call.