The biggest health insurance company in the United States, United Healthcare (UHC), is strongly considering exiting the Obamacare program. The report comes just a month after UHC said it would work to expand its presence in the program.
UHC is currently reducing its marketing efforts for plans it’s selling under the Affordable Care Act. The company might even leave the market entirely in 2017 since the market has shown to be more expensive than UHC had initially expected.
This is a major shift from last month when UHC said that it was planning to offer coverage in 11 new markets starting next year. This would bring the total number of markets covered by the insurance company to 34. Additionally, UHC recently reduced its earnings forecast for this year.
President Barack Obama has heavily pushed the Affordable Care Act. Losing UHC would be a major blow to this domestic policy. Although UHC has been slower than other insurance companies to sell Obamacare policies, the announcement likely indicates that other health insurers are also struggling in this regard.
Market analyst Sheryl Skolnick said, “If one of the largest and presumably, by reputation and experience, the most sophisticated of the health plans out there can’t make money on the exchanges, then one has to question whether the exchange as an institution is a viable enterprise.
Currently, less than 550,000 people are covered on Obamacare exchanges by UHC. Many companies have said that the premiums offered under Obamacare policies are too low to provide necessary coverage while also netting a profit.
UHC said in a statement, “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.”
With the most recent report, shares for UHC fell by 5.3%. Shares for other major health insurers, such as Anthem and Aetna, also declined.