UnitedHealthcare will leave CT exchange in 2017

UnitedHealthcare will stop offering plans through Connecticut’s health insurance exchange after this year, continuing the company’s departure from the state-level marketplaces created by the federal health law.

The company is one of four insurers that currently offer coverage to individuals through the state’s exchange, Access Health CT. As of last week, it had 1,477 customers who purchased plans through the exchange, or 1.3 percent of the marketplace’s enrollment, and covered 124 people with policies purchased through the exchange’s small business market, according to Access Health.

UnitedHealthcare’s existing exchange policies will remain in effect through the end of the year.

The company has signaled in recent months that it had concerns about the exchanges and was considering withdrawing. CEO Stephen Hemsley said last November that the insurer was losing money on business in the public marketplaces created by the federal health law, and would decide in the coming months whether to continue participating. He said at the time that the company was taking more immediate actions to reduce its exposure in the marketplaces.

The company subsequently announced it would stop paying commissions to agents and brokers selling new exchange plans beginning in 2016, which brokers said was a signal that UnitedHealthcare was pulling back from the market. The Connecticut Insurance Department later blocked the insurer from eliminating commissions because it had included them in calculating its premiums for this year.

News reports from other states have indicated that UnitedHealthcare already has announced it will stop participating in the exchanges in several states.

UnitedHealthcare’s statements and moves in recent months have led some to question whether they signal broader questions about the viability of the Obamacare marketplaces, or whether they reflect dynamics particular to the company.

Representatives from the three other carriers that sell plans through Connecticut’s exchange – Anthem Blue Cross and Blue Shield, ConnectiCare, and HealthyCT – said they plan to continue offering coverage through Access Health in 2017.

Separately, MetLife, one of the two companies that sells small-group dental plans through Access Health, plans to exit the marketplace, exchange CEO Jim Wadleigh said Tuesday.

In statements released Tuesday, leaders of Access Health sought to reassure state residents.

“We are confident that in the next open enrollment, all of our consumers will continue to find the healthcare plans that best meet their needs,” Lt. Gov. Nancy Wyman, who chairs the exchange’s board, said. “State exchanges will have some fluctuation, but [Access Health] will continue to meet the needs of Connecticut residents.”

Wadleigh praised UnitedHealthcare for having been “a good partner” and said Access Health representatives would reach out to the insurer’s members who would have automatically renewed their coverage in 2017 to help them choose a new plan.

In an interview, Wadleigh said UnitedHealthcare’s departure was unsurprising. “This is normal for companies that are stronger to win out,” he said. “In Connecticut, you see United has in many cases significantly higher rates than the other carriers and the other carriers are being more profitable.”

“While the initial perception is it’s bad because we’re losing choice, it’s also good as we’re now seeing the next phase of the Affordable Care Act here, where the market’s going to start shaking itself out and the stronger players in the individual market will stay longer,” Wadleigh added.

The consulting firm McKinsey reported that Connecticut was one of just nine states in which the individual exchange market had an aggregate positive margin in 2014. (The others were Maine, New Hampshire, Vermont, New Jersey, Indiana, Arkansas, California and Washington.)

An analysis by the Kaiser Family Foundation found that UnitedHealthcare’s departure from public exchanges could have a significant effect on competition in some markets, particularly rural areas and southern states. The foundation’s analysis found that in 29 percent of the counties where UnitedHealthcare currently offers coverage, its departure – if not accompanied by another company’s entering the market – would lead to only one available exchange insurer, while another 29 counties would end up with just two. Neither situation would apply to Connecticut.