UnitedHealth executives are talking about 'buy your own coverage' HRAs. Here are 3 recent HRA market announcements...

(Photo: Michael Nagle/Bloomberg)

1. Vericred developed "APIs" that insurers can use to create individual coverage HRA program decision support tools.

2. Take Command Health introduced an individual coverage HRA administration platform.

3. Gravie opened its private individual coverage supermarket to individual coverage HRA programs.

If many employers really begin using health reimbursement accounts (HRAs) to help employees pay for their own health coverage, UnitedHealth Group Inc. might add individual health insurance policies aimed at the HRA market.

(Related: New Final HRA Regs Could Help Brokers Reach Employees)

David Wichmann, the chief executive officer of the Minnetonka, Minnesota-based health insurer, raised that possibility Tuesday, after the company posted its earnings for the third quarter.

UnitedHealth was the first issuer of life, health or annuities to post its third-quarter results.

Earnings

UnitedHealth as a whole is reporting $3.6 billion in net income for the quarter on $60 billion in revenue, up from $3.3 billion in net income on $57 billion in revenue for the third quarter of 2018.

The company’s UnitedHealthcare health insurance unit reported $2.7 billion in operating earnings on $48 billion in revenue, up from $2.6 billion in operating earnings on $46 billion in revenue for the year-earlier quarter.

The company ended the quarter providing or administering health coverage for 49 million people, up just slightly from the number the company was covering a year earlier.

Commercial insured and administrative-services-only enrollment increased to 28 million, from 27 million.

The HRA Opportunity

In the past, the Obama administration discouraged use of HRAs to pay for individual coverage, in part because of concerns that HRA “buy your own coverage” programs would destabilize the true group market.

Under President Donald Trump, regulators have loosened restrictions on “individual coverage HRAs.”

“We’re supportive of the expansion of the HRA and the ways in which they’re used broadly,” Wichmann said, during a conference call UnitedHealth held to discuss its earnings with analysts. “We think that offering a wider set of affordable options for consumers in America is essential.”

UnitedHealth prefers the idea of individual coverage HRA-based programs over the high-priced Affordable Care Act public exchange program plans that are out there today, Wichmann said.

Wichmann said he suspects there may be some migration towards more individual offerings.

“I think our company is well-positioned to be able to offer affordable coverages for people in the commercial individual space,” Wichmann said. “That’s part of the reason why we’ve spent so much effort over the course of the last 18 months really fortifying our offerings, as well as ensuring that the distribution systems are effectively aligned to be able to drive growth and value for the people we serve.”

In recent years, UnitedHealth and other carriers have benefited from rapid expansion in state managed Medicaid plan programs.

Today, however, as Medicaid expands, ”it becomes even a larger line item on the budgets of individual states,” Wichmann said. “It’s something that needs to be persistently managed.”

Resources

A link to the exhibit that provides UnitedHealth’s latest earnings is available here.

— Read We’re the Ones Actually Improving Health Care: UnitedHealth, on ThinkAdvisor.

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