UnitedHealthcare adding one state health exchange

UnitedHealthcare is returning to one of the government-run health exchanges that the nation's largest insurer largely abandoned in 2017.

Minnetonka-based UnitedHealthcare must sell coverage next year on the health exchange for Massachusetts because it now covers more than 5,000 people in the state via small-employer health plans.

The individual and small-group markets are merged in Massachusetts, where state law requires insurers of a certain size to sell on the exchange.

"It wasn't necessarily a voluntary decision on our part," David Wichmann, chief executive of the insurer's parent, UnitedHealth Group, told investors this week. "I'm going to kind of reaffirm that nothing has fundamentally changed since we made our decision several years back now."

The addition of UnitedHealthcare in Massachusetts comes as insurers show new interest in markets under the federal Affordable Care Act that had been money losers for health plans.

There have been roughly a dozen other examples this year where carriers for 2019 are expanding in the individual market, which serves people under age 65 who are self-employed or don't get job-based coverage.

Minnetonka-based Medica plans to start selling the coverage in Missouri and Oklahoma, while startup Bright Health, which is based in Minneapolis, said it will sell individual policies in parts of Arizona and Tennessee.

The individual market underwent sweeping change starting in 2014 with the ACA, which prohibits insurers from denying coverage to people with pre-existing health conditions.

UnitedHealthcare said it sustained losses of $1.3 billion in the individual market nationwide in 2015 and 2016.

In 2017, the company competed on just five state health insurance exchanges in the individual market, down from 33 states the previous year. Massachusetts is one of the states the insurer dropped.

During a conference call Tuesday to discuss second-quarter earnings, a stock analyst asked Wichmann if UnitedHealthcare might consider expanding via the ACA's individual market over the next few years.

"Our decisions are made state-by-state and, as you know, we have a very modest presence overall," Wichmann responded. "As always, we'll evaluate for future participation on a market-by-market basis."

In 2018, UnitedHealthcare is selling individual coverage on the government-run insurance exchanges for Nevada and New York.

Last week, the Massachusetts exchange granted conditional approval to UnitedHealthcare health plans that would be sold to both small businesses and individuals, a spokesperson said.

"Massachusetts's state-level health reform law ... merged our small and nongroup markets, meaning premiums are drawn from the collective claims experience of a wider group of people across individual and small group coverage," the spokesperson said via e-mail. "This helps keep premiums more stable via scale and opens up wider choices to consumers from both market segments."

Christopher Snowbeck • 612-673-4744 Twitter: @chrissnowbeck