Lee Blasts UnitedHealth’s ACA Woes

Amid growing questions over the future of insurance exchanges, the head of California’s marketplace said the nation’s largest health insurer should take responsibility for nearly $1 billion in losses and stop blaming the federal health law.

In a blistering critique, Covered California’s executive director, Peter Lee, said UnitedHealth Group Inc. made a series of blunders on rates and networks that led to a $475 million loss last year on individual policies across the country. The company estimates a similar exchange-related loss of $500 million for this year.

An Urban Institute report issued last week, however, found that some of UnitedHealth’s troubles may have been self-inflicted. The company’s premiums were substantially higher than its competitors in many of the largest U.S. markets. The insurer also offered broader provider networks that tend to attract sicker customers who incur big medical bills.

“Instead of saying we screwed up, they said Obamacare is the problem and we may not play any more,” Lee said in an interview with California Healthline. “It was giving an excuse to Wall Street and throwing the Affordable Care Act under the bus.”

In November, UnitedHealth surprised analysts and health-policy experts with its steep losses and said it might leave the exchanges altogether, just after expanding into new states. The sudden reversal prompted questions about the sustainability of the government-run marketplaces, the linchpin of President Obama’s signature law.

UnitedHealth reiterated its dour outlook for the exchange market when it announced quarterly results Jan. 19. The company said it has seen an influx of sicker patients during special enrollment, fewer healthy people signing up and costs rising as a result.

This story was produced by Kaiser Health News, which publishes California Healthline, a service of the California Health Care Foundation.