United Healthcare parent United Health Group, which has major operations in Hartford, said this week that it lost $720 million on Affordable Care Act individual exchange health plans last year, which includes $245 million recorded in the fourth quarter “for the advance recognition of 2016 losses.”
The company had announced in November that it expected a $425 million reduction in fourth-quarter earnings because of pressure from 2015 and 2016 exchange plans.
Dave Wichmann, president and chief financial officer of UnitedHealth Group, said in prepared remarks the company expects to start the year at about 700,000 or fewer public exchange members, which are expected to decline over the year.
“We are not pursuing membership growth and have taken a comprehensive set of actions to contain membership and sharpen performance over the balance of 2016,” he said. “We have withdrawn Platinum products, increased prices, eliminated marketing and commissions, intensified clinical engagement and medical management with this membership group and reduced operating costs as appropriate.”
By midyear, the company will decide to what extent, if any, it will continue to offer products in the exchange market in 2017, he continued.
Last month, in a letter to UnitedHealth Group CEO Stephen Hemsley, U.S. Sen. Richard Blumenthal urged the company to continue its participation in the Affordable Care Act exchanges.
Overall, United Healthcare had a positive year in 2015, Hemsley said in his remarks Tuesday.
United Health Group’s full-year revenues rose 20 percent to $157.1 billion and net earnings rose from $5.6 billion to $5.8 billion.
