United Health may stop offering ACA Exchange plans

[explanade]

UnitedHealth suggests Obamacare is being gamed - MarketWatch

And even suggested that people are gaming the plans by enrolling for special enrollment periods and then submitting claims:

In a profit warning that sent its stock down as much as 7% Thursday, UnitedHealth Group Inc. said that not enough people are signing up under the exchanges set up by Obamacare and that it was considering withdrawing from them.

But there was another factor behind the lowered outlook from the nation’s biggest health insurer: people signing up after the open-enrollment period that have higher claims. Or, less charitably—people are gaming Obamacare.

In UnitedHealth’s UNH, -0.25% words: “We have identified higher levels of individuals coming in and out of the exchange system to use medical services.”

This isn’t supposed to happen. There are so-called special enrollment periods, meant to be 60 days following certain life events—marriage, birth of a child, or a loss of health coverage.

Other special periods include moving, gaining citizenship, gaining or losing a dependent, having a change in income or household status that impacts eligibility for tax credits or cost-sharing reductions, and leaving jail.

A spokesman for UnitedHealth acknowledged the issue but didn’t provide more details on how this was occurring or what medical services these out-of-enrollment users sought.

However, some are skeptical that UNH is being victimized by people enrolling just before they use medical services:

Cynthia Cox, associate director of health reform and private insurance for the Kaiser Family Foundation, said other insurers haven’t voiced these concerns. She says that it could be the group who takes advantage of special enrollment are more likely to want medical coverage.

“The penalty is the stick that motivates people,” Cox said. “If you don’t sign up for coverage in a short window, not only do you have to pay a penalty, you wouldn’t be able to sign up for another year.”

“Because special enrollment provides an exception to the latter part of the stick, it could be people that want to sign up want that coverage.”

Cox also pointed out that UnitedHealth, after skipping the exchanges the first year, was one of the lowest-cost providers, meaning that it was more susceptible to being pressured on profitability.

It seems insurers stop offering plans on the exchanges but they still try to get people to sign up for plans outside the exchanges. Presumably these are still ACA-compliant but not eligible for subsidies?

 

[jim584672]

UHC has the highest priced plans, by a wide margin, every time I look.
Something doesn't add up with this story.

 

[Mulligan]

I must say, I am a bit worried long term. I have read several articles on how people newly introduced to ACA plans have discovered they can afford the insurance but cant afford to use it, and are considering dropping it.
If a significant amount of people find out there is a dozen ways to exempt out of avoiding penalty or just realize they don't even have to pay it. A death spiral could begin.
And I struggle to find a way that government will find a consensus to fix anything on this program if it heads down that path.


Sent from my iPad using Tapatalk

 

[MichaelB]

UHC is going to stop offering individual plans on the exchanges? First it would need to start offering them. UHC is not an important insurer on many major individual health care exchanges around the country, and individual policies are not a significant source of revenue for them (I estimate less than 5%).

 

[Mulligan]

UHC is going to stop offering individual plans on the exchanges? First it would need to start offering them. UHC is not an important insurer on many major individual health care exchanges around the country, and individual policies are not a significant source of revenue for them (I estimate less than 5%).

From news report I heard this morning they are just considering it.


Sent from my iPad using Tapatalk

 

[brewer12345]

If they open access to insurance at non ridiculous premiums goes away, I will be signing up for a cube job again.

 

[jim584672]

I see this story being touted as "The biggest U.S. health insurer is considering pulling out of Obamacare..." with the implication that UHC is a huge Obamacare insurer. It is an intentional misrepresentation, I mean lie, with the aim to show why the ACA must be repealed. Totally political agenda here.

 

[explanade]

Well I saw an alert from the CNBC app. on my phone that the market as a whole was down because all health care was down:

"Stocks close mildly lower, health care lags."

So UNH was down a lot and dragged down the rest of the sector? Probably the UNH news was an excuse for profit taking.

 

[ziggy29]

As far as cost, it's interesting. I'm dealing with sorting through FEHB open enrollment, and several of the lower cost plans with decent but not the best PPO networks actually are through UHC even though the plans aren't *branded* UHC. For example, for postal workers in Texas the GEHA HDHP and the APWU consumer-directed plans are both administered by UHC, and both are among the lower cost plans. Their networks aren't as robust as, say, Blue Cross Standard but they cost a hell of a lot less, too, and they aren't bad.

Not sure why UHC would feel singled out in terms of being "gamed" in the Marketplace arena, though. Others have cut back or eliminated PPO offerings but haven't cried about bailing out completely.

UHC isn't even a really huge player in the Marketplace anyway, at least in a lot of markets.

 

[rdy2go]

UHC most likely doesn't want to fool with the small amount of business that these plans generate for them since they are a group health insuror and probably don't really want to write individual health policies. If they are losing money on that line of business then there is even more reason to dump them. They are not an eleemosynary institution. so they will do what is best for their stockholders and avoid the reporting and compliance issues they most likely have with Marketplace business.

 

[ziggy29]

UHC most likely doesn't want to fool with the small amount of business that these plans generate for them since they are a group health insuror and probably don't really want to write individual health policies. If they are losing money on that line of business then there is even more reason to dump them. They are not an eleemosynary institution. so they will do what is best for their stockholders and avoid the reporting and compliance issues they most likely have with Marketplace business.

Yeah, it's certainly not a core line of business for them, so if they don't think they can make it work, they hit the eject button. Still the reduction in competition is a bit unsettling.

 

[rdy2go]

It will get worse with Anthem and CIGNA merging and Aetna and Humana going together. They will have more market clout to squeeze the doctors fees and more political power to buy their congressional support. I don't want to make this political, but I believe the administration would like to force the country into a single payer system and the largest surviving health insurors will get paid to administer that system.

 

[ziggy29]

It will get worse with Anthem and CIGNA merging and Aetna and Humana going together. They will have more market clout to squeeze the doctors fees and more political power to buy their congressional support. I don't want to make this political, but I believe the administration would like to force the country into a single payer system and the largest surviving health insurors will get paid to administer that system.

Look, the politics could go either way. Yes, there are concerns about how the ACA will mature. And it's easy to spin...err, interpret news to either say we need to return to pre-ACA status quo or go to single payer or some such. Both sides have their agenda and their spin. But we play the hand we are being dealt now. I share concern about mergers and reduced competition. But for now it's all speculation.

I don't think it's helpful to get into the political what-might-be; that will just derail a thread that is relevant to many of us.

 

[zinger1457]

For next year I only have two providers to choose from in ACA, United Healthcare and BCBS, and BCBS dropped all their PPO plans next year. If United Healthcare leaves it's going to be very slim pickings.

 

[audreyh1]

7 of the 22 plans available to me (no subsidy) are from UnitedHealthcare according to the eHealth site.

Does that mean UnitedHealthcare is pulling these plans now?

Why would UnitedHealthcare talk about dropping ACA offerings during open enrollment?

 

[explanade]

Another article, with an analyst alleging $2.5 billion in losses in ACA products and allegations of people signing up for a few months to get benefits and then dropping out without paying penalties.

UnitedHealth move a 'wake-up call' for the White House: Analyst

What benefits can you get in 3 or 4 months? Maybe if you sign on for a plan with very low deductibles but the premiums for those plans would be very high.

It wouldn't make sense to enroll for only 3-4 months for say a Bronze plan, which has $5000 in deductibles? Only benefit you get without meeting the deductible would be preventive care, the annual physical exam?

It would be cheaper to pay out of pocket for that versus paying. 3 months of deductibles, unless you're like 23 years old or something.

 

[marko]

UHC is going to stop offering individual plans on the exchanges? First it would need to start offering them. UHC is not an important insurer on many major individual health care exchanges around the country, and individual policies are not a significant source of revenue for them (I estimate less than 5%).

The free market has a nice way of filtering out the noise, half-truths and emotion. Time will tell whether UHC is the canary in the coal mine or just another distraction.

 

[MichaelB]

7 of the 22 plans available to me (no subsidy) are from UnitedHealthcare according to the eHealth site.

Does that mean UnitedHealthcare is pulling these plans now?

Why would UnitedHealthcare talk about dropping ACA offerings during open enrollment?

No, 2016 plans are in the exchange and cannot be withdrawn. Any change would have to be effective in 2017 or later.

Another article, with an analyst alleging $2.5 billion in losses in ACA products and allegations of people signing up for a few months to get benefits and then dropping out without paying penalties.

UnitedHealth move a 'wake-up call' for the White House: Analyst

Here's a different credible source reporting the insurers have done well in 2015 with their ACA compliant individuals policies. It breaks down the detail into on and off exchange plans, which sheds some insight into why insurers may be cutting back on some policies.

Comparing Individual Health Coverage On and Off the Affordable Care Act’s Insurance Exchanges - The Commonwealth Fund

[-]There is no announcement of this change at the UHC website.[/-] edit to add:
Another link, this time to the NYT, with additional information. The one detail the Times adds is that "Risk Corridor" payments are being made at a rate lower than requested by the insurers, this may be a motive for UHC.

http://www.nytimes.com/2015/11/20/b...mates-citing-losses-in-policy-sales.html?_r=0

UHC does not break out detail of individual policies in its financial statements, so there is no way to know what is causing the challenges in profitability. No reason for us to be any less skeptical here than with any other media or financial indistry claim.

 

[easysurfer]

For next year I only have two providers to choose from in ACA, United Healthcare and BCBS, and BCBS dropped all their PPO plans next year. If United Healthcare leaves it's going to be very slim pickings.

Already slim pickings for me as my doc is not in UHC's network.

I think PPO plans on the individual market are going away like free pillows and snacks on an airline flight.

 

[MBSC]

7 of the 22 plans available to me (no subsidy) are from UnitedHealthcare according to the eHealth site.

Those not eligible for subsidies can purchase off-exchange plans. UHC will still offer off-exchange plans if they decide to exit the 2017 exchanges.

Does that mean UnitedHealthcare is pulling these plans now?

No, it was a conference call where management said they will spend the first half of 2016 "evaluating" their participation/non-participation on the 2017 exchanges. UHC has 550,000 on-exchange policyholders, or about 5% of the market.

Why would UnitedHealthcare talk about dropping ACA offerings during open enrollment?

It was a conference call due to a change in earnings expectations. Securities and Exchange (SEC) regulations for public companies with shareholders requires companies to disclose information impacting earnings in a timely manner.

No, 2016 plans are in the exchange and cannot be withdrawn. Any change would have to be effective in 2017 or later.

There is no announcement of this change at the UHC website.

Correct. There is no change at this time. They are only evaluating their future participation.

 

[MichaelB]

Already slim pickings for me as my doc is not in UHC's network.

I think PPO plans on the individual market are going away like free pillows and snacks on an airline flight.

They are disappearing in some states, getting more expensive in others. The group healthcare market is still much bigger and all the major insurers have large PPO network plans there.

The Commonwealth Fund article I linked earlier reports that off exchange individual PPO plans may have attracted a higher rate of sicker policyholders who can afford unsubsidized policies. If this is the case, it makes sense for an insurer to withdraw the policy for a few years and try to move those people onto an HMO, where they can control costs more easily.

 

[utrecht]

If insurance companies cant make money at these sky high prices, we are in a world of sh*t.

 

[easysurfer]

If insurance companies cant make money at these sky high prices, we are in a world of sh*t.

Was thinking the same thing, well, perhaps different choice of wording .

There's nothing in the ACA that mandates that insurance companies have to play. So if there is no gold rush and they walk, things could get very interesting .

 

[OnTheBeach]

HHS (gov’t administrator of the exchanges) – said in a memo that they would fully fund risk losses for 2014
HOWEVER – this is coming out of the 2016 reserves – so if losses continue they will “explore other sources of funding for risk corridor payments subject to the availability of appropriations”.

 

[Mulligan]

Those not eligible for subsidies can purchase off-exchange plans. UHC will still offer off-exchange plans if they decide to exit the 2017 exchanges.

No, it was a conference call where management said they will spend the first half of 2016 "evaluating" their participation/non-participation on the 2017 exchanges. UHC has 550,000 on-exchange policyholders, or about 5% of the market.

It was a conference call due to a change in earnings expectations. Securities and Exchange (SEC) regulations for public companies with shareholders requires companies to disclose information impacting earnings in a timely manner.

Correct. There is no change at this time. They are only evaluating their future participation.

Maybe sneaky smart on their part. People who buy on exchange are heavily subsidized and can get low out of pocket costs. Sign up and get others to pay for all the differed maladies that need to be fixed.
Many people probably don't even know about off exchange insurance. These people buying these policies have less incentive to use them since they pay the big deductibles. That may suggest better profitability for insurer.


Sent from my iPad using Tapatalk