UnitedHealth Group warned nearly two months ago that new customers from the Affordable Care Act exchanges would hurt the insurer’s bottom line, but it looks like it misestimated by how much as enrollments exceeded expectations.
UnitedHealth, the U.S.’s largest insurer, says it will incur as much as $100 million more in losses associated with 2016 ACA plans than previously forecast. That brings total ACA plan loss projections for its new fiscal year to more than $500 million, up from previous estimates of $400 million to $425 million.
The company said it would reconsider its participation in the government-mandated exchanges, according to statements made during UnitedHealths earnings Tuesday . . .
UnitedHealth reported losses of $720 million last year related to exchange enrollees, including $245 million for advance recognition of 2016 losses that aren’t included in the total estimated losses for this year. That means that UnitedHealth is expected to lose up to $745 million due to its 2016 ACA enrollees. (Read more from “UnitedHealth Says Obamacare Is Costing It Billions” HERE)