What Does the Failure of Some Co-ops and the Possible Pullout of United Healthcare Mean for the Affordable Care Act?

A man waits at the window of a reception area in a medicaid office.

Co-ops and United Healthcare (United) exiting the marketplaces may not be the shake-up many predicted because Blue Cross insurers, managed care plans, and others dominate low-cost marketplace offerings.

The Issue

The report examines 81 of the most populous areas of the country to find which insurers offer the lowest-cost silver plans, which typically have the highest rates of enrollment among marketplace plans.

Key Findings

  • Of the 81 rating regions studied: co-ops are active in more than a quarter of the regions (22) in 2016; while United, which recently announced its intentions to exit the marketplaces in 2017, operates in roughly 60 percent (48).

  • Co-ops are the lowest- or second-lowest-cost insurer in 14 of the 81 rating regions studied. United is the lowest-cost or second-lowest-cost insurer in 15 of the 81 regions studied.

  • Blue Cross insurers and managed care organizations previously offering insurance to Medicaid beneficiaries but new to the private market are the most price-competitive.

  • Blue Cross and Medicaid managed care organizations are among the lowest-cost insurers in 34 and 44 of the 81 regions, respectively.


The authors of the report note the effects of the potential United exit and any future exits by co-ops would be felt mostly in regions where they are one of the more price-competitive insurers, noting that regions in which they are more expensive than their competitors likely signals low enrollment in the plans. 

About the Urban Institute

The nonprofit Urban Institute is dedicated to elevating the debate on social and economic policy. For nearly five decades, Urban scholars have conducted research and offered evidence-based solutions that improve lives and strengthen communities across a rapidly urbanizing world. Their objective research helps expand opportunities for all, reduce hardship among the most vulnerable, and strengthen the effectiveness of the public sector. Visit the Urban Institute’s Health Policy Center for more information specific to its staff and its recent research.