Smart Benefits: Is United’s Wait Wise?

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Monday, May 19, 2014

Amy Gallagher, GoLocalWorcester Business/Health Expert

UnitedHealthcare's wait-and-see approach may be the right strategy when it comes to state healthcare exchanges.

Rather than be among the first of the insurers to jump on board, UnitedHealthcare strategically evaluated the exchanges in each state where it sells insurance to determine if it should offer plans to enrollees.

While some carriers viewed the exchanges as an opportunity to garner share in the states’ individual insurance markets, UnitedHealthcare didn’t want to risk significant losses, so chose to sit on the sidelines in all but a handful of states. Its thinking? The sickest and most costly members would select their plans when the exchanges opened for business.

That means those individuals are less likely to be in the market for coverage going forward. UnitedHealthcare’s strategy is based on the belief that the next round of enrollees will be younger and healthier than the initial exchange adopters, pointing to a more balanced risk pool – and a safer bet.

As the future and financials of the exchanges continue to shake out, UnitedHealthcare and other insurers who opted out of some states initially are likely to re-evaluate the role of the exchanges as a future market in their growth plans.

This is a game of survival of the fittest and, with UnitedHealthcare’s cautious approach, it looks like the carrier is playing to win.  

Amy Gallagher has over 21 years of healthcare industry experience guiding employers and employees. As Vice President at Cornerstone Group, she advises large employers on all aspects of healthcare reform, benefit solutions, cost-containment strategies and results-driven wellness programs. Amy speaks regularly on a variety of healthcare-related topics, and is often quoted by national publications on the subject matter. Locally, Amy is a member of SHRM-RI, the Rhode Island Business Group on Health, and the Rhode Island Business Healthcare Advisory Council.

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