UnitedHealth insurance reevaluating Affordable Care Act participation

UnitedHealth’s (UNH) announcement Thursday to reevaluate its participation in the Affordable Care Act’s insurance marketplace sparked fear for investors in the health-care sector, and ignited a conversation about the future of the exchanges.

UnitedHealth CEO Stephen Hemsley said on a call with analysts that the marketplace performance expectations have declined after the company saw more individuals coming into and out of the system to use medical services, declining performance in sponsored health cooperatives, and lower expectations for new growth.

“Although, we are disappointed with these developments and our own performance in these exchange products, we are pleased with the continued advances in performance and the strong outlook across the rest of our diversified healthcare benefits and services businesses,” he said.

Hemsley added that the company will make a final decision about its participation in 2017 with the exchanges in the first half of next year, though he noted that at this point, marketing and commissions in most of the company’s markets will be reduced or suspended.

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