One of the country’s largest health insurers warned Thursday that it may leave the ObamaCare exchanges within two years, delivering a shock announcement that could ripple through the marketplace.
At a shareholder meeting Thursday, UnitedHealthcare cast doubt on its ability to carry plans on the healthcare law’s exchanges beyond 2016, offering a more grim financial outlook than it had previously expected.
“In recent weeks, growth expectations for individual exchange participation have tempered industrywide," said Stephen Hemsley, the company's CEO.
"Co-operatives have failed, and market data has signaled higher risks and more difficulties while our own claims experience has deteriorated, so we are taking this proactive step,” he said.
The company's statement said it will be “evaluating the viability of the insurance exchange product segment and will determine during the first half of 2016 to what extent it can continue to serve the public exchange markets in 2017.”
It also projected that its fourth-quarter revenue will be $425 million less than expected — amounting to 26 cents in earnings per share.
The company also announced it has “pulled back” on marketing plans for 2016.
Hemsley's mention of the ObamaCare co-operatives, or co-ops, refers to the half-dozen startup insurers that have collapsed in the past few weeks.
Opponents of the healthcare law have seized on the closure of the co-op insurers, which were intended to increase competition, and highlighted the troubles in hearings on Capitol Hill.
Fewer than half of the original 23 co-ops are still running, and only a handful are on solid financial footing.