When UnitedHealth Group announced its plan to eliminate most of its ACA exchange participation in 2017, the hyper-politicized media were quick to report the move as an indictment of, and a death knell for the exchanges. The Chicken Little story all over again.
But while the sky is not exactly falling, it’s been rough going for insurers on the exchanges, with large insurers reporting losses in the hundreds of millions of dollars in 2015. United Health expects its two-year losses to reach $1 billion; Humana, Aetna, Highmark, Health Care Service Corporation and others have reported nine-figure losses as well. All these insurers maintain – correctly – that the current public health insurance exchange system is not sustainable as it is, but also know that the current Congress isn’t interested in fixing Obamacare.
So why are these insurers – every bit as pragmatic and savvy as UnitedHealth – not announcing plans to bail out as United did? They’re waiting for the new presidential administration and Congress – whoever they are - to either give the ACA a makeover or an execution in 2017.
If Democrats win the White House and control of the Senate, then the stakeholder insurers will be at the table to press their case for how to stabilize the exchange market. If Republicans gain the Executive Branch and keep their promise to repeal the ACA, the insurers must be there to help craft (or at least protect their interests in the crafting of) the “ACA replacement” that so far has eluded GOP strategists.
But for UnitedHealth – larger by far than the other players (at least for now) – it can afford to pull out of most of its exchange states for a year. With 43.6 million medical enrollees across its commercial, Medicare and Medicaid operations in the US, the potential loss of 795,000 money-losing exchange lives is not much of a setback. And as the largest and best-diversified of the major carriers, it will be in a position to give – or withhold – its endorsement of the “ACA 2.0” or the GOP replacement.
For the millions of Americans enrolled in exchange plans, the doom saying surrounding UnitedHealth’s exit is worrisome indeed. In many markets, the choices will narrow considerably, and premiums will certainly rise. But the sky isn’t falling. Yet.