The largest health insurer in the nation has threatened to leave the exchanges and stop offering single individual plans under the Affordable Care Act.
The largest health care provider in the country, United Health Group, announced on Wednesday that it is seriously considering pulling out of the Affordable Care Act because the health exchange system is so volatile and the profit margins are just not there.
The company said that it is considering not offering individual health care plans anymore through the state public exchanges, mostly because it did some serious damage to the company’s bottom line this year. If United Health pulls out of the Affordable Care Act, it will leave 550,000 people scrambling to find new coverage, reports USA Today.
The company lowered earnings projections and their stock took a hit because of it. They said that the growth of their projections for business with the exchanges was far too weak and they blamed the federal health care law for making things far too easy for individuals to be able to jump from plan to plan. It made long range forecasting too unstable.
Health insurance analysts have stated that the Affordable Care Act is used by individuals who actually use their coverage, which results in lower profits to the insurance companies. United Health has stopped all further marketing of its individual plans on the exchanges in an effort to minimize its potential losses even though they have already committed to providing individual coverage plans through the exchanges for 2016.
United Health doesn’t seem to be alone in its losses, as many insurers have declared that costs have been mounting for the offering of individual plans through the exchanges. According to the latest research from the Kaiser Foundation, medium level individual plans are scheduled to increase in premium price in 2016 by at least an average of 10.1 percent.
Investors were informed by United Health that there would be a $425 million shortfall in revenue during its fourth quarter than what was previously reported and expected.