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UnitedHealth agent commission move may further exchange exit

UnitedHealth agent commission move may further exchange exit

UnitedHealth Group Inc., which already is weighing an exit from underperforming business in the public health insurance exchanges, reportedly has told insurance agents it will stop paying commissions for such business starting next year.

According to Raleigh, North Carolina, newspaper The News & Observer, UnitedHealthcare sent an email last week to insurance agents saying it no longer would pay commissions effective Jan. 1, 2016, on health insurance under the Affordable Care Act in most of the two dozen states where it sells such coverage.

The newspaper also reported that UnitedHealthcare in November said that it would reduce agent commissions from as high as 10% to 2% on ACA-related coverage sold through public exchanges.

When asked to comment on the letter sent to agents, a spokeswoman for United said in an email: “Our current actions are consistent with our long-stated approach to continually evaluate the dynamics of exchanges as they evolve and adjust to changes in the market accordingly.”

United did not respond to requests for a copy of the reported email.

The UnitedHealth Group CEO warned in November that the health insurer may leave the federal health exchange business in 2017.

Mr. Hemsley said at the time that the insurer has suffered major losses from weak enrollment in the exchange plans and high medical costs among members who signed up, prompting it to cut its full-year earnings forecast.

“We cannot sustain these losses,” Mr. Hemsley said during a November call with investors. “We can’t really subsidize a marketplace that doesn’t appear at the moment to be sustaining itself.”

In addition, Mr. Hemsley last week told investors at an annual meeting in New York that jumping into the exchange business was a “bad decision” as the market needs more time to develop.

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