UnitedHealth expects Obamacare losses to reach $1 billion

UnitedHealth considers Obamacare exit

UnitedHealth on Tuesday said it will lose nearly $1 billion on Obamacare policies by the end of 2016.

The company is weighing the option to exit the affordable health exchanges after losing $475 million on Obamacare-compliant plans in 2015. The company expects to lose $500 million in 2016.

The insurer, the parent company of United Healthcare, reported 500,000 enrollees in Obamacare exchange plans for 2015. It expects that number to grow towards 800,000 during the 2016 open enrollment period, which ends January 31. Enrollee numbers are then expected to drop as some members get jobs, stop paying premiums or find insurance elsewhere.

Last year the company also had 150,000 enrollees who signed up outside the exchanges for individual policies that are compliant with Obamacare.

UnitedHealth sat out during the first year of Obamacare in 2014. The company quickly increased its prices for the program, eliminated all marketing for Obamacare, and withdrew its top tiered offerings from the exchange.

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The company has attempted to control any losses by working closely with providers and enrollees to manage illnesses and care.

The health insurer recently said it could pull out of Obamacare all together by 2017. The company cites higher than expected claims as the reason for its possible departure.

Insurers have argued that some Americans are waiting until they are sick to find a loophole for enrollment using the programs special enrollment period. That period is available to individuals who change jobs, get married or divorced or have a baby. To avoid those enrollment conditions, Obamacare has promised to tighten the restrictions on who can join the program.

UnitedHealth earned $5.8 billion in 2015, up from $5.6 billion a year earlier.

Written by John Howard

John Howard

John Howard is the Business Editor at BusinessPundit.com. He is an avid watcher of markets, a wallflower of retail, and a fan of disruptive businesses that utilize technology and unique ideas to form brilliant new ways of doing business.