The Affordable Care Act (ACA), also known as ObamaCare, relies on insurers participating in the marketplaces in each state. When major insurers are reluctant or opt out, citizens in that state don’t have as many choices and the coverage options available may not be as good. When a larger number of insurers participate in a marketplace, there is increased competition, which allows citizens to choose the best rate and coverage for their situation. Competition generally leads to lower rates as insurers vie to get enrollees.

United Healthcare is the largest health insurer in the United States. Because of this, the choices that United makes deeply affect the success of state marketplaces throughout the nation. Many other insurers look to United Healthcare as a market leader when they make their own decisions about the marketplaces.

United Healthcare and the ACA in 2014

Initially, the leadership of United Healthcare was concerned about the effect of the ACA on the health insurance industry. United Healthcare has a large number of enrollees in Medicare Advantage, which was reduced with the ACA. This, in turn, affected United Healthcare’s Medicare Advantage plans, which are private health plans offered to Medicare beneficiaries.

In 2013, the company told reporters that the Medicare Advantage changes would put pressure on profits. The large size of the company’s Medicare Advantage business caused it to bear the brunt of the changes the ACA implemented toward insurers.

As a result of all of these changes in its Medicare Advantage line of business, United Healthcare took a very conservative approach to the offering private insurance through the marketplaces in 2014.  The insurer participated in only four state exchanges, and in the remaining states, pushed to get its existing enrollees to renew before January 1, 2014 so their plans could remain in place longer. This allowed United Healthcare to try the new system in a very small way, while keeping most of its plans intact as before.

Changes for United Healthcare for 2015

One of the results of United Healthcare’s cautious approach is that competitors made big gains in subscribers in many states. In addition, the viability that the Marketplace system showed encouraged the insurer to step forward for the next enrollment period. While United Healthcare doesn’t have to commit to particular state Marketplaces until September, the CEO indicated in July 2014 that they plan to expand into as many as 24 states.

Analysts were extremely surprised by the enormous change in attitude by United Healthcare, but the insurer indicated that the ACA system looked sustainable, and with more price data on the books, they felt comfortable offering policies in a substantial number of states. In addition, United Healthcare plans to continue expansion into additional states after 2015.

This can only be good news for individual insurance buyers, as the increased competition should help keep premiums from rising too far. The more insurers that are offering coverage in a state, the more likely it is that companies will look for ways to keep their prices lower to keep enrollees from switching to a new carrier.

Americans continue to face new choices and changes in health insurance plans into 2015 and beyond. It’s important for each individual to stay informed and to carefully evaluate their plan each year to make sure that it is still meeting their needs. As competition increases, choices should become more plentiful and cheaper, helping citizens across the nation.