While it was expected, the news that UnitedHealth will exit all but "a handful" of individual exchanges drew varied reactions across the industry--with some doubtful of the move's market impact and others worried about its effect on the future of the Affordable Care Act.
Some, such as consultant and former Clinton administration health official John Gorman, saw shades of gray in the announcement from the country's largest insurer.
"It's a big nothingburger in terms of market impact," he tells Politico. "But symbolically and politically, it's huge."
Currently, United offers policies in 34 states, and a Kaiser Family Foundation analysis points out that a United exit would indeed hurt plan competition in some parts of the country where are already few plans competing, FierceHealthPayer has reported.
Yet individual policies account for just 650,000 of United's 42 million medical customers, and while the insurer said it expects to lose $650 million in the exchanges in 2016, its overall finances are strong--as its better-than-expected earnings in the first quarter led it to raise its full-year earnings outlook.
United's exchange exit, however, is a public relations blow to the Obama administration, which has strived to stabilize the exchanges before the president leaves office.
The move also could spur other health plans to further raise premiums in 2017 in order to determine which rates allow them to turn a profit on the exchanges, Avalere Health Senior Vice President Caroline Pearson tells Reuters. Insurers are currently filing their rate requests for next year--though a recent federal report points out that in years past, actual rates were often much lower than those requested.
Still, Kaiser Family Foundation President Larry Levitt tells Reuters he doesn't expect other insurers to follow in United's footsteps and leave the exchanges, noting that "United was in some sense in a category all its own."
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