If UnitedHealth Exits Obamacare – What Happens to Premiums?

UnitedHealth Group (NYSE:UNH), the nation's biggest healthcare insurer, says offering coverage on the Obamacare exchanges was a bad decision that resulted in hundreds of millions of dollars of losses. In fact, CEO Stephen Hemsley told investors last week that he may pull the company's offerings. Hemsley made similar comments last month. And at kitchen tables across the country, families enrolled in the program are asking, what will it mean for our coverage?

To be sure, UnitedHealth is a big player in Obamacare. It offers some of the least expensive policies available and its products are offered in half the nation's states. And that's important to consumers, who face looming deadlines for enrollment. Open enrollment for ACA ends Jan. 31, 2016.

What can consumers expect? Some of the nation's experts told FOX Business that higher prices and more turmoil on the exchanges is inevitable. Because UnitedHealth is the nation's largest health insurer when measured by revenues, any action it takes when it comes to the ACA exchanges is bound to have repercussions. Echoing the thoughts of many in the industry, Samuel Gibbs, executive director, of AgileHealthInsurance.com, said, "The bottom line is that prices will go up. United is a large carrier with a broad network. If they go away, choices will be fewer and premiums will be higher." His company studied the impact of UnitedHealth on exchange pricing and found that in counties where it sells the least expensive option, premiums for the lowest cost plans would increase 6 percent. Unsubsidized customers would find their costs rising 19 percent.

Could more operators such as Aetna (NYSE:AET) and Humana (NYSE:HUM) follow United's lead? In other words, if a company of United's size leaves will it set off a domino effect? Paul Howard of the Manhattan Institute says it could. The good news according to Howard? Prices won't go up right away.

"I think 2017-18 is the key year here…If UHC pulls out and the others look at their balance sheet and see they’re not making the profits they thought they would, we’re still not getting the premium increases we need to make those profits – I could see more dropping out.”