Entering into the Affordable Care Act health insurance marketplaces was a bad decision, according to the CEO of UnitedHealth Group Inc, which is considering pulling back from participation in 2017.
Entering into the Affordable Care Act (ACA) health insurance marketplaces was a bad decision for UnitedHealth Group Inc, according to its CEO.
Bloomberg Business reported that Stephen Hemsley told investors at a meeting in New York, that the company should have stayed out of the marketplaces longer. On November 19, the company announced that it was taking heavy losses as a result of its marketplace involvement and that it was considering no longer selling plans through the ACA in 2017.
“It was for us a bad decision,” Hemsley said, adding, “In retrospect, we should have stayed out longer.”
There are approximately 500,000 UnitedHealth customers on the exchanges. Other insurers have noted weak enrollment, which will take a toll on their profits, reported Reuters, but so far UnitedHealth is the only company to announce it may depart from the exchanges as a result.
As Hemsley explained during the investors meeting, the company will analyze during 2016 the products it offers and regions where it sells plans to determine where it could exit.
However, Hemsley did acknowledge that the problems were not necessarily a result of the exchanges and could be a UnitedHealth issue. Reuters further reported that a pullback from the exchanges could only be temporary, which wouldn’t be unheard of from the company, which also withdrew from Medicare Advantage and Medicaid before re-entering them later.