UnitedHealth Group executives may be even more eager to get away from the Affordable Care Act public health insurance exchange system now than they were three months ago.
Executives said in April, when they released the Minnetonka, Minnesota-based company’s first-quarter earnings, that the company might sell coverage through “a handful” of ACA exchanges in 2017.
Stephen Hemsley, the chief executive officer, said today when UnitedHealth released its earnings for the second quarter that the company expects to sell coverage through “three or fewer exchange markets” in 2017.
Hemsley himself said little else about the exchange program or other ACA programs during a conference call the company held with securities analysts today to discuss second-quarter earnings. Other executives handled the exchange questions.
Some competitors have been somewhat more positive about the exchange program.
Related: Anthem likely to give PPACA exchanges more time to stabilize
UnitedHealth as a whole is reporting $1.8 billion in net income for the second quarter on $46 billion in revenue, up from $1.6 billion in net income on $36 billion in revenue for the second quarter of 2015.
The company sells technology and support services through its Optum unit as well as insurance through the UnitedHealthcare unit. The company pointed out that Optum operating earnings increased to $1.3 billion, from $864 million. UnitedHealthcare earnings fell to $1.9 billion, from $2 billion.
The company ended the quarter providing or administering health coverage for 48 million people around the world, compared with 46 million people a year earlier.
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Commercial fully insured enrollment increased to 8.7 million, from 8.1 million.
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Enrollment in plans UnitedHealth administers for other payers, such as employers, increased to 21.8 million, from 21.3 million.
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Medicare Advantage enrollment increased to 3.6 million, from 3.2 million.
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Medicare supplement enrollment increased to 4.2 million, from 4 million.
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Medicaid enrollment increased to 5.7 million, from 5.2 million.
For a look at some of what the company’s executives said during their earnings call that might be of interest to insurance agents and brokers, read on:
Daniel Schumacher said UnitedHealth had no problem with making exchange plan sales. (Image: Thinkstock)
1. Demand for ACA exchange plans is strong.
UnitedHealth did not give ACA exchange enrollment figures, but Daniel Schumacher, UnitedHealth’s chief operating officer, said exchange plan sales have been higher than the company expected, and lapse rates have been lower than expected.
The high sales and low attrition rates occurred in spite of well-publicized cuts UnitedHealth made in individual health agent compensation levels.
Related: Aetna: Saving the PPACA exchange system is a good investment
Schumacher said many exchange plan enrollees have conditions such as HIV and hepatitis C. (Image: Thinkstock)
2. The ACA exchange plan users UnitedHealth attracted are really sick.
By the end of 2015, UnitedHealth had booked large ACA exchange plan losses for 2015 and projected it might lose about $525 million on exchange plans in 2016. It set aside $245 million in reserves for 2016 losses.
The company added $125 million to the “premium deficiency reserves” for 2016 exchange plans in the first quarter.
In the second quarter, the company added another $200 million to the premium deficiency reserves.