UnitedHealth Group Inc. will sell coverage in just a dozen of the new health exchanges being set up in states, a lower number than it had suggested earlier and a sign that insurers are treading cautiously into the new market.
Bloomberg reports on remarks made to investors Thursday by Stephen Hemsley, the CEO of Minnetonka-based UnitedHealth (NYSE: UNH). The company might eventually enter more exchanges, which are marketplaces set up under the Affordable Care Act where the uninsured can seek coverage, but for now it’s taking a wait-and-see approach. In January, Hemsley suggested UnitedHealth could sell into as many as 25 exchanges.
The reason for the change? The people who are likely to want coverage the most are probably the ones who need it the most — i.e., sick people, which are the costliest to cover. The first enrollees are likely to have a “a pent-up appetite” for medical care, Hemsley said.
It’s not just UnitedHealth that’s playing things cautiously. Aetna and Cigna also opted out of backing the California insurance exchange last week, at least for the first year. Kaiser Permanente, Anthem Blue Cross, and Blue Shield of California, the state’s largest insurers, will participate.