In what industry analysts are calling nothing short of a shockwave rippling through the marketplace, gianr health insurance provider UnitedHealthcare announced Thursday that it may bolt from the Obamacare exchanges within two years, citing lower earnings than originally anticipated as the driver in its decision.
UnitedHealthcare is one of the largest health networks in the country.
Stephen Hemsley, the company’s CEO, said in a statement:
In recent weeks, growth expectations for individual exchange participation have tempered industrywide.
Co-operatives have failed, and market data has signaled higher risks and more difficulties while our own claims experience has deteriorated, so we are taking this proactive step.
The statement went on to acknowledge that UnitedHealthcare will be “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.”
The statement also projected that its fourth-quarter revenue will be $425 million less than expected — amounting to 26 cents in earnings per share.
Hemsley’s mention of the Obamacare co-ops refers to the start-up insurance providers that have been dropping like flies. With fewer than half the original 23 co-ops still doing business, and even those on a precarious footing, some economists believe it is only a matter of time before the law becomes unsustainable and collapses under its own weight.