Short Takes On News & Events

Biggest Insurer Drops Caution, Embraces Obamacare

By Jay Hancock

July 17th, 2014, 11:58 AM

This KHN story can be republished for free. (details)

UnitedHealthcare, the insurance giant that largely sat out the health law’s online marketplaces’ first year, said Thursday it may sell policies through the exchanges in nearly half the states next year.

“We plan to grow next year as we expand our offering to as many as two dozen state exchanges,” Stephen Hemsley, CEO of UnitedHealth Group, the insurance company’s parent, told investment analysts on a conference call. He was referring to coverage sold to individuals.

The move represents a major acceleration for the company and a bet that government-subsidized insurance, sold online without regard for pre-existing illness, is here to stay. UnitedHealthcare sells individual policies through government exchanges in only four states now.

Even analysts who follow the company closely seemed surprised.

“You’re making a really big move,” Kevin Fischbeck, an analyst for Bank of America, told the company’s executives. “You’re going to do a couple dozen states. You’ve really moved in. What’s giving you the confidence … that it’s going to be stable next year?”

The answer, the bosses said, is that the marketplaces look sustainable, even without some of the reinsurance and risk-spreading backstops put in place for carriers in the first few years. They know the prices now, they said. They know the regulations. They know how consumers are behaving.

“We felt that the markets that we’re looking at now are much more established,” said Gail Boudreaux, who runs UnitedHealth Group’s insurance division.“We’ve always felt that it was part of our strategy and plan – that this is a good, long-term market.”

Broad participation by UnitedHealthcare will increase competition and should help keep premiums down, according to theory and research. A recent paper by economists Leemore Dafny, Jonathan Gruber and Christopher Ody found that if UnitedHealthcare had sold policies through the exchanges this year in every state where it already does business, premiums would have been 5 percent lower.

The company expects substantial shopping and price comparison when open enrollment begins Nov. 15 — despite the administration’s proposed regulations on automatic re-enrollment that may give incumbents an edge.

“We believe there’ll be some shopping, even though people don’t have to shop,” said Jeff Alter, head of UnitedHealthcare’s employer and individual insurance division. “The natural consumer play of an exchange is going to cause a shopping experience.”

10 Responses to “Biggest Insurer Drops Caution, Embraces Obamacare”

  1. margie says:

    When it comes to healthcare coverage, compared to every other industrialized nation in the world, Americans have the unique privilege of living in the most regressive nation on earth. In England, the National Health Service (NHS) Act of 1946 came into effect on 5 July 1948. So, citizens of England have had comprehensive healthcare services for about 66 years. Is the NHS perfect? No! But only a complete moron, or a political party filled with complete morons, would allow the perfect to become the enemy of the good. No other civilized nation on earth allows their citizens to die just because that can’t afford healthcare coverage. That unique position belong to America. Sadly, for uninsured people in America with a serious illness or injury, your best hope is to die quickly. You can thank the Republican Party for America’s ranking as last among industrialized nations regarding healthcare for its citizens.

  2. harold says:

    wow margie, you said it. thanks

  3. Cautious Skeptic says:

    True, only in other countries can you die while waiting for coverage you are entitled to regardless of income (doesn’t that sound like the VA). Oddly in those countries, the rich are still taken care of because they seek care outside the system.

  4. Yo Mamacita says:

    U.S. Has the Highest Infant Mortality Rate Among Major Developed Countries

    U.S. Life Expectancy at Birth is 42nd of 223 Countries

  5. Rachel says:


    Ditto to what Margie said, so eloquently!

  6. Nikflorida says:

    To CAUTIOUS SKEPTIC: Why is it that if the claim that people “die waiting for treatment” is not specious and meretricious, it’s always refuted by those in other countries, and no credible evidence can ever be produced for it? And folks fail to mention little things like: 6 years ago, when I nearly died of a brain infection, it was more than a week after my medical team decided unanimously that I needed brain surgery immediately before my insurance company would agree to “pre-approve” it… clearly they were just balking hoping I would die before they approved it, thus saving them money. I sure fooled them by not dying, huh?

    Only in countries that provide healthcare access to all their citizens does anyone suffer any delays, huh? Yes, Sarah Palin: there have BEEN “death panels” in the US the whole time.

  7. Peggy Girshman says:

    To Freehold Properties and any other interested party,
    We’re delighted when anyone wants to publish our stories (in full, or with our permission to edit). And it’s free. Details are here:
    best, Peggy Girshman, Executive Editor, Kaiser Health News

  8. Ron says:

    Marge – You sound like Elizabeth Warren! Great Job!!

  9. EdFLA says:

    As NIKFLORIDA says, there are always the claims that people in other countries die waiting for treatment and no supporting evidence. Maybe you will get an anecdote which may or may not be true. But there are no statistics (boring but the only lsources of relevant policy can be confirmed) to bear this out. You want anecdote? North Carolina has closed hospitals leaving thousands of real people without lifesaving care because the state government will not participate in the Healthcare law. One woman has died already for lack of access.(the anecdote, actually true). The verifiable statistics are those thousand left more than an hour’s ride to the nearest care facility.

  10. Bubba Martin says:

    Single-Payer is coming. It may take another 5 years or more, but it is coming. UnitedHealthCare sees the writing on the wall. They just want to grab as much as they can before the Single-Payer system is implemented.