Which exchanges will UnitedHealth enter in 2021?

On May 12, 2020, UnitedHealthcare announced that it filed to offer individual health plans in Maryland for 2021, and more announcements should be forthcoming

UnitedHealth Group generated a buzz in its 2020 first quarter earnings call by revealing intentions to reenter health insurance exchanges in 2021.

The insurer has a short history of offering plans on the exchanges. It had a slower start as opposed to other larger insurers; it started offering plans in four states in 2014 and gradually increased to 23 states in 2015, then 34 in 2016. After financial losses in 2016 and presumed further losses of nearly $500 million in 2017, UnitedHealth retreated from the business, although not withdrawing in all its states. The insurer, continued offering individual plans in Massachusetts, Nevada, and New York, plus SHOP plans in the District of Columbia.

Its 2021 goals could include expansion of coverage area and plans in these states.

UnitedHealth’s plan was already on the table before the COVID-19 pandemic hit the nation. However, the insurer was still gauging suitable markets for 2021 open enrollment.

Several factors have affected stability in the marketplace:

  • The COVID-19 pandemic has led to a wave of unemployment. Most newly unemployed people will qualify for special enrollment due to loss of employer-sponsored coverage. Loss of income could leave them unable to afford exchange plans, and they may look for Medicaid coverage if they qualify. Insurers offering plans on the exchanges are likely to see a surge in enrollment in months to come.
  • In 2019, health insurance exchange become a more profitable market and offered record high rebates. Centene stayed in exchanges as other for-profit insurers left and has continued to see profits while it has drastically expanded its exchange geography.

Other factors that will determine the insurer’s marketplace plans in 2021

  • Several states are adding ACA statutes to state law, such as passing a state-based individual mandate (California, New Jersey, Rhode Island, and District of Columbia).
  • States that offer reinsurance programs ensure robustness due to affordability in their market. States that already have this program are Alaska, Oregon, Minnesota, Wisconsin, Maine, Maryland, New Jersey, North Dakota, Montana, Delaware, Colorado, and Rhode Island. States that have applied for it are Pennsylvania, Georgia, and Connecticut.
  • Exchanges may not attract large membership in states that have expanded Medicaid. However, exchanges may have higher enrollment in states that impose restrictions on short-term health plans.
  • The insurer may want to recapture the lives it lost from its employer-sponsored health plans during COVID-19. That might lead UnitedHealth to target states such as Texas, California, and Arizona (Decision Resources Group, Employer Vantage 2019 data).

UnitedHealth will likely target a handful of states, such as:

  • California– As the state manages its exchange plans, it also has an individual mandate and robust enrollment figures. UnitedHealth has the size to compete with market leaders Kaiser and California’s two Blue plans.
  • Illinois– UnitedHealth captured 16 percent market share on the Illinois exchange in 2017, its only year of participation back.
  • Colorado: UnitedHealth is the commercial market leader in a competitive state, the exchange plans are managed by the state and has a reinsurance program in place. UnitedHealth put little effort into its Colorado exchange business, selling plans through a minor subsidiary (AllSavers) that consumers might not associate with UnitedHealth. UnitedHealth also owns Rocky Mountain Health Plans, which only sells exchange plans in western Colorado.
  • Nebraska: There is very minimal competition in the state as Medica was the only insurer participating for several years. During its only year of participation, UnitedHealth offered plans at very competitive prices. It is the second largest commercial carrier in Nebraska.
  • North Carolina: Blue Cross Blue Shield North Carolina is the only statewide carrier and only option for most exchange consumers, with Cigna and Centene offering coverage in very limited counties. United has a strong position in North Carolina and its past success during its year of participation may ensure notable market share if it reenters.
  • Alabama: UnitedHealth offered low-cost silver plans across Alabama in 2016 which possibly affected subsidy benchmark plan on its exit. UnitedHealth ranks among the top three commercial carriers in the state and held 12 percent market share on its exchanges in 2015.

The insurer may reveal some of its plans of providing coverage in its 2020 second quarter earnings call. UnitedHealth may want to offer exchange coverage in limited areas like it did before. This will help the insurer evaluate the profitability of exchange plans before expanding its footprint.