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UnitedHealthcare Takes $720 Million Hit From Obamacare Exchanges

Image: UnitedHealthcare Takes $720 Million Hit From Obamacare Exchanges
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By    |   Tuesday, 19 Jan 2016 02:13 PM

UnitedHealthcare Group will lose more money than it had expected through its Obamacare services, with an earnings report released on Tuesday that show the nation's largest provider lost $720 million in the new exchanges.

According to the report, full year earnings went down by $238 million from 2014 in decreases driven by $720 million in losses from individual, exchange compliant insurance, including $245 million in the fourth quarter of 2015 to account for advance recognition of losses in 2016, reports The Hill.

Further, a fourth quarter reserve totaling $95 million was established for expected losses through a state Medicaid contract, the report said.

The losses were reported following a surprise announcement in late 2015 that UnitedHealthcare, was still working to decide if it will remain in the exchanges after this year ends, and David Wichmann, chief financial officer for the company, said in a conference call Tuesday that the decision still has not been made, reports The Hill.

"By mid-2016 we will determine to what extent, if any, we will continue to offer products in the exchange market in 2017,"  he commented.

The company did beat expectations in some areas of its business, the report indicated. The full 2015 revenues went up by 10 percent in 2015, while the number of people served through the U.S. medical benefits markets grew by 1.75 million year-over-year, a figure that included balanced growth across commercial, Medicare and Medicaid offerings. In the fourth quarter alone, UnitedHealthcare served 315,000 more consumers, the report said.

Aside from the losses, the full year 2015 earnings grew by 8 percent since 2014, to $7.6 billion, but reported fourth quarter 2015 earnings decreased by $777 million, through individual exchanges-compliant product results, along with investments for Medicare Stars quality performance.

But with the number of people enrolled on the exchanges expected to grow by 200,000 this coming year, from 500,000 to 700,00 next year, UnitedHealthcare's profits are expected to take a further hit.

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UnitedHealthcare Group will lose more money than it had expected through its Obamacare services, with an earnings report released on Tuesday that show the nation's largest provider lost $720 million in the new exchanges.
unitedhealthcare, millions, hit, obamacare, exchanges
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2016-13-19
Tuesday, 19 Jan 2016 02:13 PM
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