UnitedHealth Group, the largest health-care provider in the U.S., said that next year it will pull out of Affordable Care Act marketplaces in most of the 34 states where it now operates.
“The smaller overall market size and shorter term, higher risk profile within this market segment continue to suggest we cannot broadly serve it on an effective and sustainable basis,” Unitedhealth’s CEO, Stephen J. Hemsley said.
The announcement came Tuesday, in a call with investors. But UnitedHealth had warned of such a move last November. At the time, it said it planned to re-evaluate involvement in the exchanges because participation had “tempered industrywide, co-operatives have failed,” and because analysts had projected an even harder time making money in the markets because of what UnitedHealth called “higher risks and more difficulties.”
UnitedHealth said it expects to lose $650 million in the exchanges this year. In the past week, it said it’d leave marketplaces in Arkansa, Michigan, and much of Georgia. The impact will be hardest felt in the South and the Midwest, where there are already few options in the exchanges for consumers to choose from, and it could leave as many as 1.1 million people with just one health plan option, according to a report by the Kaiser Family Foundation.