UnitedHealth To Exit Georgia, Arkansas Exchanges
Minnetonka-based UnitedHealth Group plans to exit the business of offering individual health plans through health plan exchanges in 2017 for two southern states: Georgia and Arkansas. UnitedHealth did not announce the news, which was reported by Bloomberg on Friday.
UnitedHealth spokesman Tyler Mason confirmed to TCB that the media reports were accurate, but declined further comment. The company has already stated that it is weighing “to what extent it can continue to serve the public exchange markets in 2017,” according to a mid-November statement.
The federal Affordable Care Act has offered new markets for health plan providers by creating exchanges where individuals can select insurance from a variety of competing plans. But the business has proven to be more challenging than insurers expected.
After beginning by offering health plans through exchanges in just four states in 2014, UnitedHealth Group expanded its exchange business to 23 states in 2015 and then to 34 states in 2016, according to the company’s annual filing the U.S. Securities and Exchange Commission.
But in its mid-November announcement, UnitedHealth issued a statement citing the “continuing deterioration” of the individual exchange market. The company reported that its pre-tax earnings would take a $425 million hit for losses in the exchanges.
In its annual filing, the company outlined some of the challenges it has seen after its bullish expansion into exchanges:
UnitedHealth does not offer individual health plans through the state exchange in Minnesota.
“HMOs and health plans in Minnesota are required to be nonprofits,” noted Ross Corson, spokesman for the Minnesota Department of Commerce. UnitedHealth is a for-profit company.
The latest data from MNsure, the state’s health insurance exchange, shows the program’s enrollment breakdown among five different insurance options from November 1, 2015, through March 6: Blue Cross Blue Shield (28 percent), BluePlus (8 percent), HealthPartners (24 percent), Medica (19 percent) and UCare (21 percent). BluePlus is the HMO affiliate of Blue Cross Blue Shield.
But the health plan landscape continues to shift. Last week, Fairview Health Services and UCare announced plans to merge. Health care provider Fairview is also the sole owner of the PreferredOne health plan.
UnitedHealth Group is the largest publicly traded company in Minnesota by a wide margin. For 2015, the company reported revenue of $157.1 billion, which makes it more than twice as large as Minneapolis-based retailer Target Corp. UnitedHealth Group reported net income of $5.8 billion for 2015.
The company’s revenues keep climbing: its revenue is up 54 percent from the $101.9 billion that it reported in 2011. In its January earnings announcement, UnitedHealth affirmed its financial outlook for 2016: The company is expecting revenue to top $180 billion.
UnitedHealth is set to release its first quarter earnings report next week on April 19.