UnitedHealth’s decision to drop out of the Obamacare insurance market will have little practical impact on the system, industry analysts have said.

Stephen Hemsley, UnitedHealth’s CEO, said on Tuesday that the US’s largest single insurer would be quitting most of the 34 state insurance exchanges it participated in. The company expects its participation in the exchanges, which were created as part of Barack Obama’s signature healthcare law, to cause $1bn in losses, Hemsley said.

But Sabrina Corlette, a research professor at Georgetown University’s Center on Health Insurance Reforms, said the practical impact of the move would be “pretty minimal”.

“Ultimately, I think what we will see over time is that this market, that is currently in a lot of flux, is going to settle down and that there are going to be carriers that find they can make money in this market and do fairly well,” Corlette told the Guardian.

Insurance industry consultant John Gorman told Politico the move was a “nothingburger” in terms of its impact on the insurance marketplace.

The more palpable problem is the public relations issue the announcement creates for the Obama administration.

Republican presidential candidate Ted Cruz, a Texas senator, said in a statement that United’s decision was not a surprise. “That’s the latest in a string of Obamacare failures that have led to American families losing their doctors, having few or no insurance options, and facing skyrocketing premiums and deductibles,” said Cruz.

Florida senator Marco Rubio, who last month dropped out of the Republican presidential nomination race, echoed Cruz’s statement. “It’s clear the health insurance companies that helped pass Obamacare want nothing to do with it now that they’re losing money and can’t get the taxpayer-funded bailout that was tucked deep into the law,” Rubio said.

Major insurers have expressed concerns about the cost of state health exchanges. Last month, a Blue Cross and Blue Shield Association report showed insurers were paying for patients who were sicker and needed more medical care than before. Before the Affordable Care Act went into effect in 2014, insurers could deny coverage to people because of pre-existing conditions.

But the impact of United leaving is small, in part because the insurance provider mainly traffics in employer-based insurance plans, which it does not sell on the insurance exchanges. It was only in four state marketplaces in 2014, before jumping to 23 in 2015 and then 34 in 2016.

“Overall, because United was a pretty minor player in this market, it is not a huge impact and there will be some counties where it is reducing the number of carriers to either one or two carriers, but that’s just for 2017,” Corlette said.

If United leaves every state exchange marketplace, 17% of US counties will be left with only one insurer, according to a Kaiser Family Foundation analysis released the day before United’s announcement.

This could be an opportunity for other insurance companies to participate in the state markets, though they are unlikely to do so before the 11 May deadline to enter the 2017 market.

But United’s decision could pose challenges for the nearly 800,000 individuals covered by United in a state health exchange.

If United leaves a person’s state, they will have to search for a plan that mimics their existing coverage when open enrollment starts again in November.

“That’s going to be so particularly important for anybody who is in treatment for something,” said Corlette. “So if it’s a cancer patient, you have to make sure they can still see their oncologist and their hospitals.”

Corlette said that there should be a push by United and insurance regulators to ensure people understand what they need to do and are moved to a quality product, though United is under no legal obligation to do so. They are obligated, however, to notify people that the change is being made.

The Obama administration expressed no concern that United’s decision would harm the health insurance marketplace. Ben Wakana, spokesman for the Department of Health and Human Services, said in a statement that the marketplace offers a “robust number of plan choices”. Wakana said: “We have full confidence, based on data, that the marketplaces will continue to thrive for years ahead.”

The Affordable Care Act (ACA) was signed into law in March 2010 in an effort to reform healthcare in the US to give more Americans access to affordable health insurance. Government estimates show that 20 million adults have gained health insurance since the law was passed.