If the largest healthcare insurer in the U.S. leaves Obamacare entirely, it would cause premiums to rise as much as $100 and would reduce competition, a new analysis found.
The analysis from the nonprofit Kaiser Family Foundation comes as UnitedHealth, the country’s largest insurer, is fleeing Obamacare markets in Georgia, Arkansas and Michigan starting next year. UnitedHealth has previously considered leaving all Obamacare exchanges due to losses of $425 million last year, and other insurers have had problems reaching profitability in Obamacare.
The analysis looked at premiums for this year for the silver plan, the second and most popular option in Obamacare’s three plan options. Without UnitedHealth, premiums this year for Obamacare’s silver plan would cost $25 to $100 more in 304 of 3,142 counties in the U.S. and more than $100 higher in 13 counties.
“A UnitedHealth exit would likely affect premiums most in Alabama, Arizona, Iowa, Nebraska and North Carolina,” the analysis said.
The analysis also found that if UnitedHealth leaves Obamacare entirely and no other insurers entered or left those markets, then most counties would have at least three insurers, which is enough to provide a competitive market.
Kaiser found, however, that the number of counties with one or two insurers would increase by 31 percent from 1,121 to 1,648.
UnitedHealth doesn’t have as many Obamacare customers as other major insurers such as Anthem, which has said that it is committed to Obamacare even though enrollment has not met expectations.
With insurer losses mounting, the administration has tried to address concerns to shore up support for the marketplace. The administration recently eliminated several special enrollment periods that enabled customers to sign up for Obamacare year round.
Such periods have increased prices for insurers as customers can sign up for Obamacare when they are sick, get care and then drop out.
UnitedHealth is expected to release its first-quarter financial results on Tuesday, which will provide a key update on the company’s participation in Obamacare.
