UnitedHealth will exit most exchange markets, CEO says

UnitedHealth Group plans to exit most of its exchange markets by next year, according to CEO and President Stephen Hemsley, in prepared remarks for a first quarter earnings call Tuesday morning.

"Next year, we will remain in only a handful of states, and we will not carry financial exposure from exchanges into 2017," Hemsley said.

UnitedHealth has been evaluating the public exchanges on a state-by-state basis, and since November, has said it was considering leaving the individual exchange market.

"… Our own experience and performance have been unfavorable in these markets," Hemsley said. "The smaller overall market size and shorter term, higher risk profile within this market segment continue to suggest we cannot broadly serve it on an effective and sustained basis."

First quarter revenues for the nation's largest insurer grew 9 percent, prior to acquisitions, and over 24 percent overall to $44.5 billion, with broad strength across the enterprise, Hemsley said.

This includes Medicare Advantage, which grew to serve 325,000 more seniors year-over-year, a 10 percent increase.

Based on the first quarter results and business trends, the company now expects 2016 revenues of approximately $182 billion.

UnitedHealth Group announced this week that it was exiting the Affordable Care Act market in Michigan, and Oklahoma to stem losses in its individual exchange product.

The move out of Oklahoma will be effective in 2017, according to a report by NPR, with Oklahoma being the 4th state UnitedHealth has pulled out of citing a lack of profitability.

Last week, the nation's largest health insurer made a decision to leave the exchange markets in Georgia and Arkansas. 

Should the company withdraw from exchanges across the country, premiums for exchange plans may see a modest average increase of about one percent, according to a county-by-county analysis by the Kaiser Family Foundation Monday. That amounts to about $4 a month, but some markets could go see larger increases. 

[Also: Competition suffers most if UnitedHealth exits Obamacare in 2017, analysis shows]

Earlier this year, UnitedHealth reported that it had lost $720 million on its individual exchange product and warned that it might leave the market. 

Twitter: @SusanJMorse