UnitedHealth, the nation's biggest health insurer, will cut its participation in public health insurance exchanges to only a handful of states next year after expanding to nearly three dozen for this year, the AP reports. CEO Stephen Hemsley said Tuesday that the company expects losses from its exchange business to total more than $1 billion for this year and last. He added that the company cannot continue to broadly serve the market created by the Affordable Care Act's coverage expansion due partly to the higher risk that comes with its customers. UnitedHealth has already decided to pull out of Arkansas, Georgia, and Michigan in 2017, and Hemsley told analysts during a Tuesday morning conference call that his company will not carry financial exposure from the exchanges into 2017.
UnitedHealth moved slowly into this newly created market by participating in only 4 exchanges in their first year, 2014. But the company then expanded to two dozen exchanges last year and said in October it would add to that total. It currently participates in exchanges in 34 states and covers 795,000 people. A month after announcing its latest exchange expansion, UnitedHealth started voicing second thoughts. The insurer said in November that it would decide by the first half of this year whether to even participate in the market for 2017. Insurers say they have struggled, in particular, with customers who have signed up for coverage outside regular enrollment windows and then dumped expensive claims on their books, a problem the government has said it would address. UnitedHealth Group Inc. said it now expects to lose $650 million this year on its exchange business, up from its previous projection for $525 million. The insurer lost $475 million in 2015, a spokesman said. (Read more ObamaCare stories.)