UnitedHealth Group to Expand on Obamacare Exchanges Due to Stable Market
UnitedHealthcare, the insurance giant that stayed out of most Obamacare marketplaces during the first year, said on Thursday, July 17, it may sell policies through the exchanges in nearly half the states come 2015.
“We plan to grow next year as we expand our offering to as many as two dozen state exchanges,” Stephen Hemsley, CEO of UnitedHealth Group, the insurance company’s parent, told investment analysts on a conference call. He was referring to coverage sold to individuals.
UnitedHealth said it will expand its private health plan offerings on government-run marketplaces known as exchanges after closely examining the first year of the law and pricing of competitors. UnitedHealthcare currently sells individual policies through government exchanges in only four states.
Even analysts who follow the company closely seemed surprised. Kevin Fischbeck, an analyst for Bank of America, told the company’s executives that this was “a really big move” and asked them where the confidence was stemming from for them to believe the marketplace will remain stable in the coming year.
The answer, the bosses said, is that the Obamacare marketplaces look sustainable.
“We felt that the markets that we’re looking at now are much more established,” said Gail Boudreaux, who runs UnitedHealth Group’s insurance division. “We’ve always felt that it was part of our strategy and plan – that this is a good, long-term market.”
Once open enrollment begins Nov. 15, the company expects substantial shopping and price comparison, despite the administration’s proposed regulations on automatic re-enrollment that may give incumbents an edge.
“We believe there’ll be some shopping, even though people don’t have to shop,” said Jeff Alter, head of UnitedHealthcare’s employer and individual insurance division. “The natural consumer play of an exchange is going to cause a shopping experience.”