UnitedHealth’s earnings report reveals it has been losing significant money on the HIEs established under the Affordable Care Act. Consequently, the insurance provider is considering withdrawing from the Exchanges by 2017.

On the subject of how much money they lost, UnitedHealth revealed in a regular earnings conference call with stakeholders and analysts that the estimate stands at $500 million in 2016. The plan is to scale back the marketing of HIE marketing plans and cut the commission paid to brokers who bring in consumer enrolment. The poor performance of its ACA plans has already caused UnitedHealth to lose $350 million in 2015.

After the news came out, experts have been giving differing opinions on how this will effect healthcare legislation. This move by UnitedHealth, the nation’s largest insurer, does not bode well for millions of consumers who could start receiving insurance. On the other hand, the law may be serving a function of rooting out unviable products from the market.

UnitedHealth gives coverage to 1 out of every 20 people through plans bought from an HIE, which is about 6% of people signing up for insurance at an Exchange. Following the announcement, many large insurers like Anthem, Aetna, and Kaiser Permanente, hurried to stress that they would remain with the HIEs despite their own troubles.

Still, UnitedHealth is not the only insurer to encounter financial challenges from participating in Exchange business. There are other companies struggling to make a profit, but those are still waiting for a consistent profit to materialize. If UnitedHealth goes through with the withdrawal from the marketplace, consumers will still have plans available from competitors.

The issues UnitedHealth cited as the reason for their losses involves their consumer mix, which it says shows ‘adverse selection’, by being unhealthy, expensive to insure. There are too few enrolling who are healthy and cheaper to insure.

For every insurer selling coverage in the HIEs, it is important to find and sign up healthy consumers in order to stay successful. An estimated 24 million Americans have eligibility for federal subsidies when buying health insurance on an Exchange, but only 8.6 percent of these people are seeking the benefits of a plan.

UnitedHealth also reports that many consumers enrolled in order to avail healthcare for a few months, and then dropped their coverage for the rest of the year. This meant insurer missed out on premium payment for the latter period, while still requiring to make benefit payments to providers.

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