2018 MIDTERM ELECTION

Time: D H M S

UPDATE: UnitedHealthcare and the scoop which coulda been a contender

UPDATE: I've gotten the OK from my source, Joshua Dickerson, to give him a public should-out for the heads up.

Regular readers know that although I do spend a lot of time updating this website, I do still have to do my day job running a website development firm. As a result, I'm simply not able to keep up with every healthcare-related hot tip which comes my way.

So, when the following link was forwarded to me a few days ago, while I did find out more details from the sender, I didn't happen to get around to actually posting anything about it before today:

UnitedHealthcare Announces Changes to 2016 Exchange Sales and Compensation

Over the past few months, we've seen an acceleration of changes in the health insurance market. UnitedHealthcare is continually evaluating all aspects of the evolving exchanges so that we can provide coverage options that best meet consumers' health care and financial needs.

In response to market changes, it has become clear that we must adjust our commission schedules for our 2016 individual on-exchange business in certain states to better align with the demands of the marketplace. New schedules have been posted on E-Store. The commission changes will be effective for business received as of Tues. Nov. 17, 2015 and after.

These adjustments are consistent with our long-stated approach to carefully evaluate and better understand the dynamics of exchanges as they have become clearer over time, and enable us to continue offering consumers a range of quality health plans. Today's changes do not affect our members, their networks, plan benefits or the servicing of their plans.

A key factor in our success is the relationship with brokers like you who offer our products. We value this strong relationship and know that consumers also find value in the professional services you provide, especially in this complex market.

Thank you for your business and also your patience as we implement these changes.

According to my source (again, I haven't confirmed this or anything) here's what "adjusting our commission schedule" supposedly means in practice for insurance brokers trying to help people enroll in policies for 2016:

Yesterday, only 2 weeks into OEP 2016, United Healthcare attempted to "shut off" enrollment by reducing agent commissions by up to 80% or more in most states. In addition, United removed quoting & enrollment functions for all marketplace plans through agent/broker portals. Apparently, United is seriously concerned about their exposure/losses/enrollment for 2016. This is a major blow to call centers and large web brokers such as Ehealth, who rely on United's broad FFM footprint to enroll business. I believe a lot of this is due to the reinsurance debacle. Also important to note that this is United's 2nd year on the FFM & they experienced some major technical glitches (mostly related to billing) during plan year 2015.

So, not good, right? Again, however, I've just been swamped and haven't had a chance to post about it, especially with yesterday being crammed full of enrollment report data. It's an important development, and would have been a Huge Scoop for me if I'd written about it yesterday...but I just didn't have the time to do so.

Cut to this morning (h/t to Bijan Salehizadeh for the heads up and Bruce Japsen of Forbes for the story):

UnitedHealth Group May Leave Obamacare Exchanges By 2017

UnitedHealth Group UNH +2.56%, in a surprising announcement, said this morning it has revised its profit expectations for the rest of the year due to what it called a “deterioration” of its individual commercial insurance offerings on government-run exchanges under the Affordable Care Act and offered no commitment it would stay in the business beyond next year.

The nation’s largest health insurer said it was “evaluating the viability of the insurance exchange product segment,” pulling back on its marketing efforts for individual exchange products for next year and “will determine during the first half of 2016 to what extent it can continue to serve the public exchange markets in 2017.” The insurer sells individual plans on public exchanges in 24 states and covers more than a half million Americans in these plans.

The most important thing I can think to stress for the moment is that 1) UHC is not dropping out of the market for 2016 and 2) they are not saying that they are dropping out in 2017 either; they're saying that they haven't decided yet, but want to give investors/other parties a heads up given the dramatic change from their recent previous statements. Making this announcement publicly in the middle of the 2016 Open Enrollment period--before the December deadline for January coverage--was presumably designed to make people reluctant to enroll with UHC without actually dropping out, a similar tactic to the broker commission cut described above. On the other hand, they may have been required to make this announcement now anyway for SEC/legal reasons; I really don't know much about that sort of thing.

In any event, the timing of this announcement means that even if UHC stays on the exchange market next year after all, it will still likely have an impact on this year's enrollment situation. I don't know if that will mean a net reduction in people signing up or simply people shifting over to other insurance carriers (which would have some sort of ripple effect on premiums/etc), but it will definitely cause the landscape to change, given how large UHC is and how many states they operate in.

UPDATE: As Ken Kelly notes in the comments, as of 9/30/15, UnitedHealthcare held roughly 540,000 currently effectuated exchange enrollees out of roughly 9.1 million (or more?) nationally, or around 6% of the total. On the one hand, that's a lot of people. On the other hand, it's considerably smaller than the cumulative enrollments of the 12 Co-Ops which are folding completely, so it's a matter of perspective as to how serious of an issue them dropping out in 2017 would be (and once again, they aren't saying that they will drop out, just that they're considering it).