Tag Archives: United healthcare

United Healthcare exits Individual Market

While this has garnered alot of attention around the country and in the press and media, it is no surprise to anyone in the industry.  “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.

While United covers more Americans for health insurance than any other private insurer, it has only been a bit player in the individual/exchange marketplace;  most of its members are corporate plans.

A big part of the problem that was completely expected by industry experts is that the exchanges are “adversely selected” meaning that they have sicker enrollees.  “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 original expectations of the administration was that younger members that were healthier would offset this problem, but they have not enrolled as expected.

Why United healthcare is leaving the PPACA

While its not official, it is very clear that United Healthcare intends to leave the individual health marketplace next January 1.  Here is why:

  1.  Partial year insureds-  they sign up, run up a bunch of claims, and then stop paying premiums.  For example, they join, pay $400 a month for three months, have $100,000 heart surgery, and then stop paying premiums and cancel the insurance.  They are, by the way, free to do this every year!
  2. The exchanges are not attracting healthy individuals.  less than 30 percent of all enrollments are under age 34 – meaning more claims for less premiuns.
  3. Grandfathers Policies- while many states have recently allowed a big increase on these plans, as long as they exist, these (more likely healthy) people are not required to join the PPACA plans.
  4. Risk Corridor Payments- The bill promised a safety net on high claims, but paid only 12.5% of the promised amount.  That leaves a $2.5 billion shortfall – and that assumes the 12.5% ever actually gets paid (not as of today).  This is exactly the problem that put the Co-ops out of business (can you say HealthRepublic and Consumers Choice?)
  5. Pricing models- most people are buying the lowest price plans.

The only question I have is – are they the only major carrier that drops out?


NYU leaves United Compass Network


We have been advised that NYU is no longer in our UHC Compass Individual exchange network as of 1/1/16 as United Healthcare was unable to agree on an updated contract. Letters have gone out to exchange members to advise them of the change.

For members currently involved in an ongoing course of treatment or pregnancy in their second or third trimester, they may be able to continue to receive covered services through Continuity of Care benefits.

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Reeve Conover is a Registered Representative. Securities offered through Cambridge Investment Research, Inc., a Broker/dealer member FINRA/SPIC. Cambridge and Conover Consulting are not affiliated. Licensed in SC, NC, NY, CT, NJ, and CA.
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