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NEWS - Largest US Insurer’s Move Signals Industry Shift

July 17, 2014 – The nation’s largest health insurer expects to play a much bigger role in the health care overhaul next year, as the federal law shifts from raising giant questions for the sector to offering growth opportunities.

UnitedHealth Group said Thursday that it will participate in as many as 24 of the law’s individual health insurance exchanges in 2015, up from only four this year.

These state-based exchanges debuted last fall as a way for customers to buy individual health insurance, many with help from income-based tax credits. They played a key role in helping roughly 8 million people gain coverage for 2014.

But UnitedHealth and other insurers approached them cautiously, in part because they had little information about the health of the people who would sign up. That uncertainty was compounded by a provision in the overhaul that prevents them from rejecting applicants based on health.

Now, some of that uncertainty is starting to dissipate, which gives insurers “a little more confidence to try to tap into some of the opportunities,” said Jennifer Lynch, an analyst who covers the sector for BMO Capital Markets.

“I think the hesitation on the part of the companies has really been largely because of the unknowns,” Lynch said.

UnitedHealth CEO Stephen Hemsley told analysts on Thursday that the insurer had always planned a prudent, initial approach. But they also understand that the exchanges will become a more established part of future health care benefits, and they don’t want to enter the market too late.

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