Hemsley, who is now 65, will become UnitedHealth’s executive chairman.
Richard Burke, the current chairman, will stay on the Minnetonka, Minnesota-based health insurer’s board as an independent director.
The UnitedHealth said in a statement about the changes that they will help ensure continuity as the company continues to grow and evolve.
Hemsley said in a statement of his own that, “This is the right time for this transition to take place.”
“The company is performing strongly and has a positive outlook for the foreseeable future, and Dave Wichmann is the right choice to succeed as CEO for that future,” Hemsley said.
UnitedHealth is one of the biggest health insurers and health care services providers in the United States. The company reported $2.4 billion in net income for the second quarter on $50 billion in revenue. It ended the quarter providing or administering major medical coverage for 49.5 million.
Hemsley began working for the company, as an executive vice president, in 1997. Before that, he was managing partner and chief financial officer at Arthur Andersen, an accounting and consulting firm.
(Image: Centers for Medicare and Medicaid Services)
Wichmann was a partner at Arthur Andersen while Hemsley was there. He moved to UnitedHealth as a senior vice president for corporate development in 1998. He served as chief financial officer at the parent-company level from 2011 through 2016, and he has been the president of the company since 2014. He has a bachelor’s degree in accounting from Illinois State University.
One question for the future will be UnitedHealth’s level of commitment to the commercial health insurance market. In recent quarters, executives have tended to describe UnitedHealth as a health care services company, rather than as an insurance company.
UnitedHealth stayed out of the Affordable Care Act public exchange system in 2014, when it started up, to avoid startup glitches. The company entered the system in 2015, said little about the exchange plan business in early 2015, and then began talking about exchange plan pressure on profit margins in October.
By January 2016, Hemsley and other UnitedHealth executives were warning that the company would probably pull its products out of many states’ ACA public exchange programs.
Wichmann has been participating in UnitedHealth’s quarterly conference calls with securities analysts since at least 2012.
In January 2016, for example, Wichmann was the executive who warned that UnitedHealth might slash its level participation in the ACA exchange system, partly because of concerns about how regulators and exchange program managers were addressing concerns about exchange plan application fraud.
In October 2016, Wichmann briefed analysts on the strength of the company’s Medicare and Medicaid plan operations.
In January, Wichmann was the executive who explained how Penn Treaty failure guaranty fund assessments might affect UnitedHealth’s finances.
UnitedHealth appears to be one of the health insurers that would like to see life and annuity product issuers play a bigger role in helping state guaranty funds shoulder the burden of protecting long-term care insurance policyholders against insolvencies involving issuers such as Penn Treaty.
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