The largest health insurer in the U.S. is backing out of Obamacare in two states, with the possibility of more to follow.
UnitedHealth Group announced it will stop selling insurance plans in Arkansas and Georgia after failing to turn a big enough profit.
Many insurers have found it difficult to maintain profit margins after restrictions under the Affordable Care Act, commonly referred to as Obamacare, made it more difficult to turn down people who are costly to insure, according to The Washington Post.
The company entered into the Obamacare market in January 2015 after sitting out the first full year of operations in 2014, The Fiscal Times reported. But CEO Stephen Hemsley told investors recently: “It was for us a bad decision. In retrospect, we should have stayed out longer.”
Hemsley received $66.13 million in compensation in 2014, the last year for which that information is available and the first year Obamacare was in full-effect. That's nearly a $40 million increase over what he made in 2013, which was $28.14 million, according to the Hartford Courant. The majority of the compensation is from stock value.
Nonetheless, Hemsley insists UnitedHealth Group is hurting under the Affordable Care Act.
In January, the company claimed it would lose $1 billion over the course of two years because of Obamacare, reported the Associated Press.
"We cannot sustain these losses," Hemsley said in November 2015, according to the Los Angeles Times.
"We can't really subsidize a marketplace that doesn't appear at the moment to be sustaining itself," he added.
Despite its claims of losing money, UnitedHealth still exceeded 2015 fourth-quarter earnings expectations due to high earnings from other aspects of the company's services, including Optum, its healthcare technology arm, according to the Associated Press.
It's not yet clear that UnitedHealth will stop selling coverage on the Obamacare marketplace in other states, but analysts say that is likely, given the company's outspoken disenchantment with the profit performance so far.