Study: Drop in competition if United leaves ObamaCare

If the insurer UnitedHealth dropped off the ObamaCare marketplaces nationwide, it would have an “appreciable” effect on the number of choices available to consumers, but would not affect premium prices much, according to a new study. 

{mosads}The new study from the Kaiser Family Foundation finds that if United dropped out nationwide, a majority of U.S. counties would only have the choice of one or two insurers on the ObamaCare marketplace, which is below the threshold of three insurers seen as needed for strong competition. 

The percentage of counties with only one or two insurers to choose from would grow from 36 percent to 53 percent, the study finds. 

As a result, 1.4 million people, or 11 percent of ObamaCare enrollees, would have the choice of only one insurer if United exited nationwide, up from 2 percent currently. 

Still, the large majority of enrollees, 70 percent, or 8.9 million, would continue to have a choice of three or more insurers even if United exited. 

Also, because United often is not offering one of the cheapest plans, the effect on premiums would be small if the insurer exited, the study finds. Nationwide, the benchmark premium would have been just 1 percent higher on average in 2016 if United had not participated anywhere in 2016, the study finds. 

For about 6 percent of the enrollees in areas United currently serves, premiums would increase by $25 to $100. For about 1 percent, premiums would increase by $100 or more. But for a much larger share of people, 78 percent, premiums would change by less than $1. 

UnitedHealth in November said it might drop off the ObamaCare marketplaces in 2017 because of financial losses. The company will have a closely watched earnings call on Tuesday. 

The Obama administration argues that the attention on United is overblown, given that it is a fairly small player in the ObamaCare marketplaces, with about 6 percent of enrollees. 

United is just part of the picture, as a range of insurers have complained of financial losses on the ObamaCare marketplaces, and some others have pondered exits. 

Premiums are widely expected to rise next year to help make up these losses, though those effects will often be cushioned for consumers by ObamaCare’s tax credits. 

The administration says it expects that insurers will both come and go as the new market set up by the law develops, but that the marketplace will continue to succeed.  

“The Marketplace is a reliable source of coverage for millions of Americans with a robust number of plan choices,” Department of Health and Human Services spokesman Ben Wakana said in a statement. “We have full confidence, based on data, that the Marketplaces will continue to thrive for years ahead.”