The country’s largest healthcare company, United Healthcare, is exiting Obamacare starting in 2017.
United Healthcare announced during its quarterly earnings release on Tuesday that it is removing its offerings from almost all Affordable Care Act exchanges by 2017.
“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 sustained basis,” said CEO Stephen Hemsley in the company’s quarterly earnings conference call.
“Next year we will remain in only a handful of states, and we will not carry financial exposure from exchanges into 2017. We continue to remain an advocate for more stable and sustainable approaches to serving this market and those who rely on it for their care.”
News of United Healthcare’s exit doesn’t come as a big surprise, the company recently said it was reviewing all ACA exchanges to determine the financial impact of the program.
The exchanges are state-by-state marketplaces that allow Americans to compare and sign up for now-mandated health-insurance coverage.
Hemsley said the exchange was expensive because enrollees were generally in worse health than other healthcare buyers, making it more expensive to insure them.
“So as we look at it, the early indications on the health status of the members appears to be a little bit worse,” said UnitedHealthcare CFO Daniel Schumacher.
The company expects to lose $650 million on people covered through the exchanges in 2016 after losing $475 million in 2015, according to Schumacher.
United Healthcare covers 795,000 people through the exchanges as of the end of the March 2016 and at the end if the year he expects to cover 650,000.