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UnitedHealth Group, the nation's largest health insurer, announced Tuesday that it will bepulling out of Obamacare's insurance marketplaces in most states where it operates, raising questions about what the move would mean for customers and whether competitors would carry out their threats to leave as well. The news came just a day after a Kaiser Family Foundation analysis projected the outcome of such a withdrawal. It found that though most people would be affected by mild premium increases of about 1 percent, or only $4 a month, customers in just over half of U.S. counties would be left with only one or two health insurance options. Most of these counties are rural or in Southern states. In 13 counties, premiums could rise by more than $100 a month. Consumers also wouldn’t have the option of keeping the same plan, but would need to choose a new one. This could mean changing doctors and hospitals as well, because their new insurance may not be accepted by some providers. The online marketplaces, or exchanges, allow people to buy health insurance every year at a reduced cost, because the federal government chips in to help pay for premiums. Having several plans to choose from can increase competition and help keep costs at bay. Stephen Hemsley, UnitedHealth’s CEO, said Tuesday that the company expects its losses from participating in the exchanges to be $1 billion. For now it participates in 34 states and covers nearly 800,000 people – a small fraction of the 13 million people who signed up for insurance through the exchanges. The company isn’t the first to terminate its participation with the marketplaces. A dozen nonprofit health insurance cooperatives shut down last year, and Aetna’s leadership has said it has serious concerns about the sustainability of the exchanges. Blue Cross Blue Shield also has said it would consider dropping out. about the sustainability of the exchanges. Still, Sabrina Corlette, senior research professor at Georgetown University's Center on Health Insurance Reforms, does not think this spells overall trouble for Obamacare exchanges. "I'm not sure there is a herd mentality with the insurance companies," she says. "Each is assessing its own position with the exchanges. If some pull out, it won't be because UnitedHealth did it." Tim Jost, a health law professor at Washington and Lee University School of Law, said UnitedHealth wasn't essential to the operation of the exchanges, but works more with employer-sponsored insurance. "They were never as fully engaged as other insurers," he says. Experts have said one of the reasons insurers are dissatisfied with the exchanges is that they did not know how to properly price their plans when the programs started. Under the health care law insurers cannot turn anyone away for a pre-existing condition, and must offer a range of benefits. Insurers also have said that when the government allows people to enroll outside of a specific timeframe they cannot price plans properly. The administration has worked to address these concerns. To manage costs, insurers will need to continue raising premiums but will also need to find ways to help beneficiaries stay healthy, including by working with patients in a primary care doctor's office instead of in the emergency room, Jost says. The Obama administration has said it is not concerned about the UnitedHealth decision, and that in the early years of the exchanges it expects changes and adjustments. UnitedHealth’s involvement in the exchanges is small compared to other companies, accounting for about 6 percent of enrollees, and its plans were more expensive than those offered by other insurers, members of the administration have pointed out. “The marketplace is a reliable source of coverage for millions of Americans with a robust number of plan choices,” Ben Wakana, spokesman for the Department of Health and Human Services, said in a statement. “We have full confidence, based on data, that the marketplaces will continue to thrive for years ahead.” Further, even the Kaiser Family Foundation analysis cannot take into account whether other health insurers will now enter the market – they have until May 11 to decide to do so. “One person’s exit could be another carrier's’ opportunity,” Georgetown's Corlette says. “We’ll need to see things shake out over the next few weeks.” She also pointed out that UnitedHealth may choose to re-enter the exchanges in a few years. Last year, 39 insurers exited the exchanges, while 40 entered. Blue Cross Blue Shield recently reported that members enrolled through the exchanges have significant medical needs, and therefore higher costs associated with care. The group said in a statement that it wanted to "continue to provide coverage in their communities," and was implementing incentives for prevention, wellness and management of chronic care. Kaiser Permanente has said it remains strongly committed to participating in the exchanges.


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