22 June 2016 - United Healthcare’s announcement on April 19, 2016, that it would be withdrawing from most of the health insurance exchanges in which it had been participating has triggered another round of hand-wringing about the future of the exchanges, which were created under the Affordable Care Act.

Detractors took it as further proof of the exchanges’ flawed design, an enrollment pool that is sicker than can be supported, and a politicized rate-setting process that deters insurers. The exit of the health insurance giant is hardly the death knell for the Afforfable Care Act, but it will meaningfully reduce insurance competition in some markets, and it points to the challenges and limitations of maintaining insurer competition as a policy priority in small, fragmented lines of business.

United has not been a major player in the ACA exchanges. It was a cautious entrant at the start, and only in the past year did it expand to 34 states. It’s estimated that United had less than 6% of the 10.2 million “effectuated” enrollees (those who had applied for and paid for coverage) in exchanges at the end of last year’s open enrollment in March.

For more details, go to: http://www.nejm.org/doi/full/10.1056/NEJMp1605841?query=TOC