UnitedHealth might ditch Obamacare.
In a release early Thursday morning, UnitedHealth said that the company is, “evaluating the viability of the insurance exchange product segment and will determine during the first half of 2016 to what extent it can continue to serve the public exchange markets in 2017.”
Said another way, the country’s biggest health insurer is wondering if it still makes sense to offer insurance to individuals through an Obamacare-mandated exchange.
In its release Thursday, UnitedHealth tempered expectations for its 2015 and 2016 earnings, citing losses on, “individual exchange-compliant products related to the 2015 and 2016 policy years.”
UnitedHealth said earnings for the full-year 2015 would now be around $US6.00 per share, or $US0.26 per share below what the company previously expected.
Next year, the company expects to earn $US7.10-$US7.30 per year for the full year. UnitedHealth is set to hold an investor conference on December 1. In afternoon trade on Thursday, shares of UnitedHealth were down about 5%.
Obamacare, or more formally, the Affordable Care Act, requires all individuals to have health insurance. To facilitate this, the government set up exchanges where individuals can go to compare and ultimately buy insurance for themselves and their family.
And UnitedHealth is now coming out and saying it might not make sense for them to participate in these exchanges anymore.
According to The Wall Street Journal, UnitedHealth CEO Stephen Hemsley said on a call this morning that, “We can’t subsidise a market that doesn’t appear at this point to be sustaining itself.”
In its statement, UnitedHealth added that the company, “remains a strong supporter of sustainable efforts to ensure access to affordable, quality care for all Americans, and has advocated publicly for this for more than 20 years, including as one of the first businesses to focus on serving people through managed Medicaid and Medicare.”
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