Bye-Bye: UnitedHealth Exiting All But a Handful of Obamacare Exchanges in '17

UnitedHealth Group (NYSE:UNH) Chief Executive Officer Steven Hemsley said on Tuesday that the company would largely exit the Obamacare exchange market in 2017, following through on a warning he had given late last year that costs appeared to be unsustainable.

Hemsley, in prepared remarks made as part of the company's first-quarter earnings report, said that after a state-by-state review, it had found that the smaller overall market size and shorter term, higher risk profile suggested it could not offer plans on a sustained basis. UnitedHealth sells these individual insurance plans, created as part of President Barack Obama's national healthcare law, in 34 states this year.

Ticker Security Last Change Change %
UNH UNITEDHEALTH GROUP INC. 458.43 +1.59 +0.35%
AET n.a. n.a. n.a. n.a.
CI CIGNA CORP. 234.02 -0.72 -0.31%

Separately, the insuer raised its expectations for 2016 profit, in part because of a more favorable tax rate that also helped it beat Wall Street expectations for the first quarter.Lower sales and administrative costs and a lower amortization of intangible assets also helped its first quarter profit rise about 9 cents more than analysts expected.