Image source: Department of Health and Human Services.

Obamacare has survived legal wrangling and Supreme Court rulings, but a decision by UnitedHealth Group (NYSE:UNH), America's biggest health insurer, could prove to be its biggest challenge yet.

Insuring millions
After essentially avoiding participation in the Affordable Care Act exchanges in 2014, UnitedHealth Group offered healthcare insurance plans in two dozen states this year and is offering plans in 34 states for 2016.

The company's late start allowed competitors Aetna (NYSE:AET) and Anthem (NYSE:ANTM) to get a valuable head start in signing up members, but UnitedHealth Group's expansion into additional states this year did allow it to sign up more than a half a million members through Obamacare. Still, UnitedHealth's exchange membership trails that of its rivals and represents only about 6% of the 9.1 million people who have gotten their insurance through the marketplaces in 2015.

For comparison, 1.1 million people have signed up for health insurance with Aetna, and 824,000 have signed up for coverage through the exchanges with Anthem. 

Making ends meet
Despite seeing its Obamacare membership climb, UnitedHealth Group told investors this week that it's losing so much money on Obamacare plans that it's cutting its earnings outlook for this year to $6 per share from prior projections of at least $6.25 per share.

Further, UnitedHealth Group's management acknowledged that if its losses on Obamacare plans don't improve, it could decide early next year to forgo participating in the exchanges in 2017.

If UnitedHealth Group does opt out of offering plans on the exchanges, it could create a big gap to fill, significantly reduce competition in certain markets, and effectively lead to other insurers increasing their premiums by more than they would have otherwise.

UnitedHealth Group's revelation comes only a few weeks after the company reported third-quarter financials.

In the third quarter, UnitedHealth Group's revenue rose 27% from a year ago to $41.5 billion, and its earnings per share totaled $1.65, which was only $0.02 better than last year's third-quarter results.

Greater demand for medical care tied to exchange members appears to be to blame for the relatively anemic bottom-line performance. In the quarter, UnitedHealth Group's net margin dropped 1.1% year over year to 3.8%.

Image source: Anthem.

Competitors' mixed-bag results
Aetna and Anthem are also struggling to make money on the marketplaces, but neither of them appear willing to walk away from Obamacare -- at least not yet.

In late October, Aetna's CEO Mark Bertolini admitted that its Obamacare business is challenging, but that it could still be a big opportunity.

In the third quarter, Aetna reported its operating revenue had climbed 2% to $15 billion, and that its operating earnings per share totaled $1.90, which was 7% better than industry watchers forecast.

Aetna's pre-tax operating margin improved to 8.4% from 7.8% last year, and "moderate cost trends" led to Aetna boosting its full-year financial outlook to operating EPS of at least $7.45, up from its prior $7.40 forecast.

Over at Anthem, membership this year is expected to grow by at least 800,000 people, and that growth contributed to a 7.6% increase in operating revenue to $19.8 billion.

Anthem's benefit expense ratio, a measure of how much of every premium dollar is spent on patient healthcare, ticked up 1.1% to 83.6% in the quarter. Yet, despite that headwind, Anthem reported EPS of $2.73, up 9.2% from the third quarter of 2014.

Like Aetna, that performance resulted in management boosting its outlook for full-year EPS of at least $10.10, which is far higher than the $9.30 it came into 2015 expecting to earn per share.

Looking ahead
It's too early to determine what the fall-out may be for the Obamacare exchanges if UnitedHealth Group pulls the plug, but investors may not want to give up on owning insurers.

Premiums charged on the exchanges by insurers were initially set without real-world insight into how much healthcare Obamacare members would demand, and results at Aetna and Anthem could suggest that while those markets remain a drag on profitability, experience from participating more widely than UnitedHealth Group in the first open enrollment may have allowed it to price its products more appropriately than UnitedHealth Group this year.

Regardless, because 10 million Americans are expected to get their insurance through the exchanges during this open enrollment, and rising penalties this year and next year could further increase enrollment, long-term thinking by insurers and investors could be rewarded.

Todd Campbell has no position in any stocks mentioned. Todd owns E.B. Capital Markets, LLC. E.B. Capital's clients may have positions in the companies mentioned. The Motley Fool recommends Anthem and UnitedHealth Group. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.