Largest US Health Insurer Pulls Away from Obamacare

The largest U.S health insurer is pulling away from Obamacare. United Health has made the decision to limit its participation in the Affordable Care Act's insurance exchange.

The move will leave more than 700,000 people to seek coverage with other insurers. 

The announcement comes after the company experienced heavy losses when it expanded into 34 states. 

United Health officials said that they expect to lose $650 million this year on its exchange business. 

CEO Stephen Hemsley said Obamacare's instability, small market size and costly patient population "continue to suggest we cannot broadly serve it on an effective and sustained basis," reported the Wall Street Journal.  He said United Health will withdraw to "only a handful of states" in 2017.

Earlier this week, Hemsley told financial analysts that the company would not carry into 2017 financial exposure from the exchanges, which represent a small slice of its overall business.

"We continue to remain an advocate for more stable and sustainable approaches to serving this market," he said.

The company plans to pull away from Arkansas, Georgia, Louisiana, Michigan, and Oklahoma in 2017. 

Meanwhile, other insurers may move into those marketplaces to replace it.

"I think insurers will have to become more selective in terms of which exchanges and how they participate, but by far and away I think the United move will be the biggest one this year," said Mizuho Securities Managing Director Sheryl Skolnick.