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UnitedHealth’s Profits Continue To Soar After Ditching Obamacare


The largest health insurance company in the U.S., UnitedHealth Group, exceeded its quarterly-profit expectations in the second quarter of 2017, as it continues to make gains after the provider decided to almost entirely opt-out of the Obamacare state exchanges.

United’s second quarter net-earnings were $2.28 billion, up from $1.75 billion in the same quarter of 2016. The company’s total revenue rose 7.7 percent to $50.05 billion, which followed expectations, Reuters reports. Positive earnings have the company raising its 2017 earnings forecast.

UnitedHealth was the first health insurance company to expose the most significant problem with the legislation — offering plans on Obamacare exchanges is a money-losing proposition.

In April 2016, the company announced it was reducing 765,000 of the Obamacare exchange policies it planned to offer in 2017, citing massive profit losses of $475 million in 2015 and expected losses over $600 million for 2016.

“The smaller overall market size and shorter term, higher-risk profile within this market segment continue to suggest we cannot broadly serve it on an effective and sustained basis,” UnitedHealth Chief Executive Officer Stephen Hemsley told reporters in April 2016. “Next year, we will remain in only a handful of states, and we will not carry financial exposure from exchanges into 2017.”

The company reduced its exposure on the exchanges significantly, cutting its participation from 34 states in 2016 to just three in 2017 — Virginia, Nevada and New York. It plans to drop Obamacare plans in Virginia in 2018.

The decision to remove itself from the state exchanges isn’t just proving lucrative now, the company experienced near immediate gains. Reducing its exposure to the exchanges propelled the company towards double-digit percentage profit growth in the first-quarter of 2017.

First-quarter 2017 earnings from operations and revenues were up 15 and 11.8 percent respectively from the first-quarter of 2016 — the same quarter the company announced its massive reduction in Obamacare plans.

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