UnitedHealth Group, the largest health insurer in the United States, will expand its planned withdrawal from exchanges created under the Affordable Care Act, CEO Stephen Hemsley said in an earnings call with investors Tuesday. The company reported that its first-quarter revenue rose to $44.5 billion, up 25 percent over the same period last year. Its adjusted earnings of $1.81 per share was up 17 percent from 2015 and beat analysts' expectations by 9 cents.
Those revenues were driven in large part by Optum, United's health services business, which raked in $19.7 billion in revenue in the first quarter, up from $12.8 billion over the same period last year. But UnitedHealth Group continues to post losses on Obamacare exchanges, which it characterized as posing greater risks due to sicker patients with higher medical costs. The company has previously said it lost $720 million on those exchanges in 2015.
"Next year we will remain in only a handful of states," Hemsley said during Tuesday's call, referring to marketplaces created under the Affordable Care Act. The company would "not continue exposure into 2017," he added. It remains unclear how many state exchanges and in which ones UnitedHealth Group will continue selling policies.
UnitedHealth first warned in November that it would was considering exiting Obamacare marketplaces in 2017. It has since confirmed it would leave exchanges in Michigan, Arkansas and Georgia. It currently sells policies on exchanges in 34 states in the U.S., although not necessarily in every county in each.
An estimated 800,000 of UnitedHealth Group's total of 13.5 million customers are enrolled in policies sold on exchanges. The not-for-profit Kaiser Family Foundation found in an analysis released Monday that should UnitedHealth Group pull out of all Obamacare exchanges, more than half of affected counties would be left with just one or two insurers. Three insurers is considered adequate to provide sufficient competition.
In 2015, United reported $157.1 billion in revenue, a 20 percent increase over the previous year. It said that its earnings from operations of $6.8 billion that year would have amounted to $7.6 billion had it not been exposed to losses on Obamacare exchanges.
This year, the company expects revenues of $182 billion, with adjusted earnings of $7.75 to $7.95 per share.