Big Changes to Expect from UnitedHealth Group by 2017
UnitedHealth Group, the largest health insurer in the United States, announced in April of 2016 that it plans to exit most of the 34 states where it offers coverage on the Affordable Care Act insurance exchanges. The announcement came shortly after the release of the company’s first quarter report of 2016.
In the Red
UnitedHealthcare, one of two businesses that UnitedHealth Group operates in, first announced its consideration in November of 2015 due to escalating costs on Obamacare plans. On April 19th, 2016, when the company made its announcement, it also mentioned they’d lost $475 million in 2015 and was on track to lose $650 million in 2016.
A Shrinking Market
By announcing the departure, UnitedHealthcare will limit competition in about 10 states, mostly those located in the south. For example, in Alabama there are 67 counties and the company currently operates in all of them. After 2016, they will begin leaving the individual market. This will leave the state with 60 of their 67 counties with only one insurance provider that participates in Obamacare.
Even though this is the most extreme example of UnitedHealthcare affecting the market, Kansas and Oklahoma are just two other states that will be as greatly affected as Alabama.
Affecting the Lone Star State
Out of the 254 counties in Texas, 30 will be affected by the sudden change. Of those 30, there are over 1 million enrollees in the UnitedHealthcare marketplace exchange. Seven counties are expected to be left with only a single insurance provider in the market with Obamacare. In Hidalgo County, UnitedHealthcare currently offers 18 different coverage plans.
Texas still has one of the highest uninsured rates in the country, but over the past few years, the state has made progress. According to the Centers for Disease Control and Prevention, before the Affordable Care Act became a law, the uninsured rate for Texas was 25%. By 2015, it had fallen to 16.8%. In comparison, the national average went down to 9.1% at the end of 2015. Texas had the second-highest enrollment for 2016 behind Florida.
Carefully Moving Forward
Originally, when the Affordable Care Act was passed 2014, UnitedHealthcare was cautious about entering the marketplace and only became available for just a handful of states. The next year, the company expanded its reach and became available in the marketplace in 23 states. Despite its losses, UnitedHealthcare expanded once again in 2016 to 34 states.
Shepard Walton King’s Norma Padilla stated, ”This is big news for the insurance industry. UnitedHealthcare is the largest overall provider of insurance and we can see the effects of this move. Customers on individual plans are now switching to employer plans.”
The Bright Side
The news isn’t all gloom and doom for UnitedHealthcare, though. The report released on April 19th stated that the company actually had a very large profit for the first quarter of 2016 despite expecting a loss of over $600 million for the year, overall. That was the third straight quarter where UnitedHealth Group made over $32 billion in revenues, an overall growth of $3 billion.
The changes in the insurance industry in 2016 actually steered uninsured people to purchase coverage. The cost for the penalty of not buying insurance jumped from $325 per adult in 2015 to $695 in 2016. In the past year, UnitedHealth Group saw an increase of 700,000 more enrollees for UnitedHealthcare coverage.
As of right now, those who are interested can still contact UnitedHealthcare for individual quotes and/or coverage policies. The new changes are not to go into effect until 2017. This recent change in the market should not deter anyone from purchasing coverage. Having health insurance is still the law, and lacking it is still punishable by fines that are getting steeper and steeper.
Buy Insurance Now
If recent changes have put you in the market for coverage, here are four things to remember when buying insurance. Consider what’s important to you when getting protection then think about which plan your doctor uses or prefers, since that might be the one best suited for you, then evaluate the cost. When all is said and done, hire a broker from Shepard Walton King to help you find the insurance you and your family need.
We’re Here for You
If you’re in the search for an effective health insurance plan, Shepard Walton King is here for you. We have the knowledge and experience to guide you in the right direction to find the coverage that best suits your needs. Contact our McAllen office today to get the process started.
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