UnitedHealth Group on Thursday told investors that it is downgrading its earnings forecast due to difficulties and risks associated with participation in U.S. Affordable Care Act exchanges. The company, the largest U.S. insurer, indicated it may exit the ACA health care marketplace entirely for 2017. Photo by Ken Wolter/Shutterstock

MINNETONKA, Minn., Nov. 19 (UPI) -- The nation's largest health insurance provider said Thursday it will scale back efforts to attract customers under the Affordable Care Act in 2016, and may exit the federal marketplace entirely the year after that.

UnitedHealth Group, which insures nearly 600,000 people in the government-led program, said the moves are due to "higher risks" making it more challenging to turn a profit.


UnitedHealth is the first major insurance company to indicate it might leave the exchange, which federal officials say will provide coverage for about 10 million Americans by the end of 2016.

The company made the remarks as it downgraded its earnings forecast and blamed the Affordable Care Act for giving customers perhaps too much flexibility to change plans -- saying those who sign up for coverage are using it too much, which cuts into profits, USA Today reported Thursday.

"We see no data pointing to improvement," UnitedHealth CEO Stephen Hemsley said on a conference call Thursday.

UnitedHealth said it will suspend marketing ACA plans to potential customers for 2016, but has already committed to offering coverage for the year.

While the group's exit from the ACA marketplace might be a significant move, some analysts say it would probably make too small a dent to topple the entire exchange.

Others say the news may be an indicator of a tough financial climate for President Barack Obama's signature health care law.

"They're the largest carrier. They're very good at looking at their own data," analyst Katherine Hempstead told The Washington Post Thursday. "If they can't make this work, that means this is a really tough environment."

Federal health officials were quick to respond to UnitedHealth's potential change in course

"Today's statement by one issuer is not indicative of the marketplace's strength and viability," Health and Human Services spokesman Ben Wakana said. "The reality is we continue to see more people signing up for health insurance and more issuers entering the marketplaces."

Wakana said federal health care exchanges are stable enough that there are an average of five providers offering coverage for every county in three dozen states.

Insurer Kaiser Permanente, which offers coverage in eight states and Washington, D.C., said Thursday it has no plans to quit the ACA exchanges.

"We remain strongly committed to continuing to participate in the health exchanges," CEO Bernard Tyson said in an emailed statement. "While there have been challenges at times, we believe at the end of the day they are causing healthy disruption, and are forcing the health care industry to respond better to consumer needs."