UnitedHealth Leaving Most ACA Exchanges

UnitedHealth Group, the nation's largest health insurer, said it will exit by next year most of the 34 states where it offers plans on the Affordable Care Act insurance exchanges. The move comes despite improved revenue and earnings in the first quarter this year.

UnitedHealth, which serves 70 million Americans, already planned to withdraw from marketplaces in Arkansas, Michigan and portions of Georgia next year. Last year, the insurer said it suffered financial losses and threatened to leave all of the exchanges by 2017. The insurer then in January reported anticipated losses of $1 billion in 2015 and 2016.

"We will be down to a handful of states that we will be actively participating in the exchanges," CEO Stephen J. Hemsley said in an earnings call Tuesday. "He said the small market size and high risk of doing business in the exchange led to the decision.

UnitedHealth offered plans in just four states in 2014 initially in Obamacare.

An analysis by Kaiser Family Foundation found that UnitedHealth's departure would vary from county to county.

If UnitedHealth were to leave all states, 532 counties would go from three insurers to two and another 536 from two to just one. Combining these counties with the 1,211 counties already with one or two insurers would mean more than half of the U.S. counties would have one or two exchange insurers, the report said.

Before the decision, the Obama administration tried to downplay any departures from UnitedHealth.

"We have full confidence, based on data, that the marketplace will continue to thrive for years ahead." Health and Human Services spokesman Ben Wakana said in a statement Monday. "The number of insurers per state has grown year over year. The marketplace should be judged by the choices it offers consumers, not the decisions of any one issuer."

UnitedHealth Group on Tuesday reported revenues of $44.5 billion through in the first quarter compared with $35.8 billion last year for a 25 percent gain. Earnings from operations were $3 billion, up 17 percent from $2.6 billion.

UnitedHealth added 2 million people domestically in the past 12 months, including 1.3 million more in the first quarter.

Hemsley said, "Our commitment and determination to constantly improve how we serve customers and consumers in health benefits and services is reflected in consistent, market-leading organic growth and strong levels of customer retention in the first quarter."