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Health Works Collective > News > Good riddance: United finally gives up on ACA marketplaces
NewsPolicy & Law

Good riddance: United finally gives up on ACA marketplaces

DavidEWilliams
Last updated: April 28, 2016 2:38 pm
DavidEWilliams
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ID-100146585

United we hardly knew ye

ID-100146585

United we hardly knew ye

United Healthcare announced that it’s exiting most of the Obamacare insurance marketplaces (aka exchanges) next year. Sound like a familiar story? In fact all the recent news coverage is just a rehash of last November’s announcement that United was probably going to exit.

As I wrote at the time (United pulls out of ACA exchanges: Should we care?), United’s exit is not a huge deal. The company specializes in selling high-priced plans to corporate accounts. In the price-sensitive world of the exchanges that’s a losing proposition. No surprise — United wasn’t getting traction.

In January (Like I said: United’s ACA exchange departure is no big deal) I reported on a study that showed that the name brand, high-priced commercial players like United were losing out to insurers with a Medicaid managed care background and to mission-oriented Blues plans. United’s departure represents the failure of United, not the failure of the marketplaces. If United says otherwise, it’s a sore loser.

Health plans thinking of competing in the marketplaces should say this to themselves a few times before diving in: “Exchange business is price sensitive business. If we can’t compete on price we might as well stay home.”

Now, if United were a little more clever and capable it actually could make a play for the exchange business, in a way that would boost its success in the commercial market as well. In particular, there are opportunities to better manage the way specialty care is delivered and paid for, by emulating the approaches used by the most efficient and innovative specialists. This would drive down the overall cost of insurance and improve care for patients. Some astute players in the bundled payments space are starting to figure it out. Somehow I don’t think United will be the one to make it happen.

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

—

By healthcare business consultant David E. Williams, president of Health Business Group.

 

TAGGED:health insuranceobamacareUnited Healthcare
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