After taking a pretty cautious approach to the launch of the health insurance marketplaces in 2014, the nation’s largest insurer said it’s looking to expand its Obamacare footprint in 2015.
UnitedHealth Group, which is participating in just five public exchanges this year, said it’s likely to join more insurance marketplaces in 2015 but didn't offer specifics. Executive vice president Gail Boudreaux, on an earnings call with investors Thursday morning, said the company “has a bias to increase” the company’s participation in Affordable Care Act exchanges in 2015 after seeing encouraging trends in the program's first year.
“The size of the overall market is positive,” Boudreaux said. She said consumers’ large interest in “silver” health plans – mid-level insurance plans in which insurers cover 70 percent of the care costs – is another positive sign for the young exchanges. Almost two-thirds of customers selecting health plans through the exchanges have chosen silver plans.
Chief executive Stephen Hemsley cautioned that the insurer is still evaluating the insurance marketplaces, noting that it won’t have to make a final decision until September. “We have time to see how this plays out a bit,” he said.
Though UnitedHealth has limited participation in exchanges this year, its health-care technology division, Optum, has emerged as a major player in the marketplaces. It helped repair HealthCare.gov, as well as a few broken state-run exchange Web sites. The company said the unit saw revenue rise 29 percent from this quarter a year ago, and it expects to take on more business as a result of its work to rescue HealthCare.gov.
Still, the insurance giant saw its earnings fall 7.8 percent this quarter, which the company partially attributed to Medicare Advantage cuts and Obamacare taxes. The change driven by the health-care law has been “immediate and significant,” Hemsley said.
UnitedHealth is the first major insurer to report quarterly earnings since the full launch of the ACA's coverage expansion, so it will be interesting to watch how bigger players in the Obamacare marketplaces view their early experience. But UnitedHealth’s comments come shortly after a Politico story noted insurers are optimistic about exchanges in 2015.