UnitedHealth Group Inc., the largest U.S. health insurer, has decided to call it quits in two state Obamacare markets, in the latest challenge to President Barack Obama’s healthcare overhaul.
The insurer won’t sell plans for next year in Georgia and Arkansas, according to state insurance regulators. Tyler Mason, a UnitedHealth spokesman, confirmed the exits and declined to say whether the company would drop out of additional states.
Many insurers have found it difficult to turn a profit in the new markets created by the Affordable Care Act, where individuals turned out to be more costly to care for than the companies expected. UnitedHealth and Aetna Inc. both posted losses from the policies last year, as did big Blue Cross and Blue Shield plans in states like North Carolina.
UnitedHealth began warning in November that it might exit Obamacare markets as it racked up losses. In December, the company said it should have stayed out of the individual exchanges for longer.
UnitedHealth’s decision to stop offering ACA plans next year means that people who are currently enrolled with the insurer will have to choose a new health insurance provider next year. It doesn’t affect their current coverage.
While UnitedHealth is the biggest carrier in the U.S., with about 42 million medical customers, it has a smaller role in the ACA’s markets. The company had about 650,000 in individual exchange-compliant policies as of Dec. 31.
About 12.7 million people signed up for Obamacare coverage for this year, including about 587,800 in Georgia and 73,600 in Arkansas, according to the Centers for Medicare and Medicaid Services. CMS doesn’t disclose what insurers people picked.
Kenneth Ryan James, a spokesman for the Arkansas Insurance Department, said UnitedHealth had a “small footprint” in the state, where Blue Cross and Blue Shield plans are dominant. UnitedHealth is also exiting that state’s small business exchange and a related business selling private Medicaid plans, he said. The Arkansas Democrat-Gazette earlier reported UnitedHealth’s decision to exit Arkansas.
Including UnitedHealth, Georgia has nine health insurers that currently offer ACA polices, according to Glenn Allen, a spokesman for the state’s insurance commissioner. Others include Aetna, Humana Inc. and Cigna Corp. No other company has yet told Georgia that it’s exiting, and companies have until May 11 to decide, he said.
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