As investors await UnitedHealth Group's (UNH) - Get Report release of first-quarter earnings on Tuesday, April 19, the U.S. health insurer reportedly is planning to quit offering Affordable Care Act plans in a third money-losing state. 

UnitedHealth will stop offering ACA plans in Michigan in 2017, The Wall Street Journal reported Friday evening. The news comes after the Minnetonka, Minn., company revealed plans to exit the Georgia and Arkansas markets earlier this year. 

"For the most part, these decisions to exit are probably well received by investors," Jefferies analyst David Windley said.

The health insurance giant said in January that it anticipated losses of more than $500 million on its 2016 ACA plans, as opposed to a previous estimate of $400 million to $425 million in losses.

The challenges of participating in ACA exchanges may demonstrate to the government that their current structure is not sustainable and certain changes need to be made, such as further tightening of the open enrollment period, Windley suggested. 

Nonetheless, the timing of decisions to retreat from individual insurance markets come as a bit of a surprise.

Expectations had been for the company to make a decision about its exchange markets by the middle of the year, the analyst said. A midyear decision also seemed somewhat premature, he said, given that exchange pricing and financial performance on exchanges has a significant lag time given that claims processing takes a while.  

"The interesting question might be, could we see [UnitedHealth] continue to exit states between now and the middle of the year to the point they don't participate in any by the end of the year?" Windley said. 

On the one hand, UnitedHealth is thinking it can't justify the company's continued participation in markets that have no clear path to a reasonable or required return, Windley said. On the other hand, the company might believe that with enough encouragement the government will make enough changes, it may want to have a placeholder in the better markets so it can re-expand later, the analyst said.

Despite the attention UnitedHealth's exchange plans have garnered, the business accounts for just a small portion of the company, whose market capitalization lies north of $120 billion. 

Analysts expected UnitedHealth, which is scheduled to release its first-quarter earnings before the opening bell Tuesday, would post adjusted earnings per share of about $1.72, about 18% more than the $1.46 in diluted EPS generated during its first quarter last year. 

Windley said he anticipated a "modest upside surprise" on earnings.

Besides overall results, Windley said to keep an eye on UnitedHealth's Medicare Advantage enrollment numbers, which he suspects may also be better than anticipated. Even as overall growth in the Medicare Advantage industry slows a bit, UnitedHealth expects to have high enrollment growth, he said. 

Shares of UnitedHealth, listed on the New York Stock Exchange, were up about 0.4% to $127.82 in afternoon trading Monday.