The nation’s largest insurer said it booked $720 million in losses last year by offering plans under Obamacare, and warned Tuesday that it might still withdraw altogether from the health law by next year.
UnitedHealth Group told investors that it expects more losses due to Obamacare in 2016, countering an otherwise upbeat earnings report for the company, and serving as a challenge to President Obama, who wants to leave the law on firmer footing.
The administration brushed off the news, saying other major insurers are sticking by the exchanges and that it is focused on the final two weeks of 2016 open enrollment.
UnitedHealth, based in Minnetonka, Minnesota, shocked the health sector in November when it said it planned to scale back its offerings in the marketplace set up by the Affordable Care Act, citing a sicker-than-expected customer base which the company said was skewing the economics of the plan.
It doubled down on that threat on Tuesday.
“By mid-2016, we will determine to what extent, if any, we will continue to offer products in the exchange market in 2017,” UnitedHealth Group President and Chief Financial Officer David S. Wichmann told investors.
The company said it ended 2015 with about 500,000 customers from the Obamacare exchanges — a number that has grown to roughly 700,000, as open enrollment extended into mid-January.
It expects that number to reach nearly 800,000 by the end of the sign-up season on Jan. 31, and then recede as people drop out of the market and the company refuses to chase more.
“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,” Mr. Wichmann said.
For its part, the Health and Human Services Department echoed what it said when UnitedHealth threatened to leave in November — that “statements from one issuer are not reflective of the marketplace’s overall strength going forward.”
“More Americans are getting covered, and we’re confident this positive trend will continue,” HHS spokesman Benjamin Wakana said.
At least 11.3 million Americans have selected 2016 coverage since open enrollment began on Nov. 1.
With 12 days left to sign up, HHS Secretary Sylvia Mathews Burwell and HealthCare.gov CEO Kevin Counihan will travel to the Carolinas, Florida, Texas and Kansas City, Missouri, to whip up enrollment.
“We are squarely focused on what more we can do to reach more people with this important information before time runs out,” CMS spokeswoman Lori Lodes said in a written update for reporters. “We’re doubling down in these final days to do everything we can to make sure each uninsured American understands their options for affordable coverage at HealthCare.gov.”
The administration said Tuesday it is buying more television advertising in metropolitan areas with a large number of uninsured residents.
Since Jan. 4, ads touting the federal HealthCare.gov exchange have warned customers that they face a tax penalty of $695 or 2.5 percent of income above the filing threshold — whichever is higher — for staying uncovered in 2016.
Officials say they will not extend open enrollment for people who miss the cutoff, meaning someone would need to get married or experience another significant life change to sign up and avoid the tax.
CMS said Tuesday it will eliminate special enrollment periods it deems unnecessary, so insurers have adequate time to price their products and aren’t hit by customers who wait until they are sick to get covered.
“Building an attractive Marketplace starts with establishing a predictable, stable set of rules that help to keep the risk pool balanced,” the agency said.