UnitedHealth Group’s on-and-off relationship with the Affordable Care Act’s health insurance marketplaces is heating up again.
The nation’s largest health insurance provider is looking to jump back into a market it largely fled a few years ago after suffering huge losses. Company leaders said Wednesday that they started thinking about a potential expansion before the coronavirus pandemic hit, and they are still reviewing markets.
“We will have a more hardened view of our individual exchange intentions on the second-quarter earnings call,” company executive Dirk McMahon told analysts during a call to discuss the company’s first-quarter performance.
McMahon is CEO of UnitedHealth Group’s UnitedHealthcare segment, which focuses on the company’s insurance business.
The ACA set up marketplaces in each state where people can shop for individual insurance coverage and then buy a plan with help from income-based tax credits.
UnitedHealth started small when these markets opened. It sold coverage in four marketplaces in 2014 before jumping to 24 the next year and then adding more after that.
But by late 2015 former CEO Stephen Hemsley was telling analysts the company regretted doing such a quick expansion before learning more about the still-new business.
By 2016, the insurer had expanded to 34 states and was covering nearly 800,000 people through the marketplaces. But it also was expecting to lose $850 million on what amounted to a small slice of its total enrollment, and it had decided to slash participation.
The insurer currently sells coverage in only a few markets, including Massachusetts, New York and Nevada, spokesman Eric Hausman said.
“We have always said that we are continually reviewing the markets and would re-enter where we saw opportunities to deliver value in stable markets,” Hausman said in an email.
Several insurers cut their exchange participation in those initial years, as companies struggled with higher-than-expected claims, among other problems. But companies have since gained a better understanding for the customers in that market and how they can make money off of it.
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