Good riddance: United finally gives up on ACA marketplaces

April 27, 2016
United we hardly knew ye

United Healthcare announced that it’s exiting most of the Obamacare insurance marketplaces (aka exchanges) next year. Sound like a familiar story? In fact all the recent news coverage is just a rehash of last November’s announcement that United was probably going to exit.

As I wrote at the time (United pulls out of ACA exchanges: Should we care?), United’s exit is not a huge deal. The company specializes in selling high-priced plans to corporate accounts. In the price-sensitive world of the exchanges that’s a losing proposition. No surprise — United wasn’t getting traction.

In January (Like I said: United’s ACA exchange departure is no big deal) I reported on a study that showed that the name brand, high priced commercial players like United were losing out to insurers with a Medicaid managed care background and to mission-oriented Blues plans. United’s departure represents the failure of United, not the failure of the marketplaces. If United says otherwise it’s a sore loser.

Health plans thinking of competing in the marketplaces should say this to themselves a few times before diving in: “Exchange business is price sensitive business. If we can’t compete on price we might as well stay home.”

Now, if United were a little more clever and capable it actually could make a play for the exchange business, in a way that would boost its success in the commercial market as well. In particular, there are opportunities to better manage the way specialty care is delivered and paid for, by emulating the approaches used by the most efficient and innovative specialists. This would drive down the overall cost of insurance and improve care for patients. Some astute players in the bundled payments space are starting to figure it out. Somehow I don’t think United will be the one to make it happen.

Image courtesy of Stuart Miles at

By healthcare business consultant David E. Williams, president of Health Business Group.


5 thoughts on “Good riddance: United finally gives up on ACA marketplaces”

  1. The cost across the board of health care is way too much. I;m talking patients all the way to doctors, medical workers, hospitals, pharma…All of it. We need to get our health care back from the government and we need to make changes with our money and how we vote. The costs can come down, Joe Flower’s book Getting What We Pay For is a great resource for change. He’s got a plan, it would be great to see his ideas work, health care costs would drop, because they can. Flowers site is

    1. Thanks for the shout-out, Annie! Yes, the book is
      How To Get What We Pay For: A Handbook For Healthcare Revolutionaries.

      And you’re right: the whole United argument, like much of the argument about healthcare, is focused on the cost of healthcare coverage. The real gold to be mined is in the underlying costs of healthcare, the third of all healthcare costs that are wasted on things we don’t need and aren’t helpful, the extreme inefficiency and often ineffectiveness of the system.

      David, you hint at this in your last paragraph, about bundled payments and the greater efficiency developing in certain specialties. When we change the way we pay for something, any industry will change the types of products that are offered. Bundled payments, reference pricing, onsite clinics, risk contracts, capitation, mini-caps and such are all examples of this in healthcare: Different payment practices (skirting away from strict fee-for-service) tied to new offerings from the industry. This is the direction that will lead to the most profound changes in the healthcare industry, and especially for employers.

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