UnitedHealth, America’s largest health insurance provider, says it will exit from most ObamaCare exchanges next year, citing more than $1 billion in losses.
CEO Stephen Hemsley says his company “cannot continue to broadly serve the market created by the Affordable Care Act’s coverage expansion due partly to the higher risk that comes with its customers,” as reported by the Associated Press.
The announcement came after UnitedHealth revised its projection for 2016 to $650 million in losses, up from a previous estimate of $525 million, after ending 2015 some $475 million in the red.
As the AP tells it, UnitedHealth had “second thoughts” almost immediately after announcing it would expand participation from four state exchanges to 34.
A Montage of Obama’s “If You Like Your Plan Keep It” Lies:
Guess what? You didn’t get to keep your health plan or your doctor after all, what a surprise.
As of last November, the company was debating a complete exit from all ObamaCare exchanges, but has apparently decided to remain active in a “handful” of states, which Hemsley did not specify in his conference call to report company earnings. It has already been announced that the company was pulling out of Arkansas, Georgia, and Michigan.
The Washington Post cites a Kaiser Family Foundation study that estimated about 1.1 million ObamaCare customers would be left with a single insurance provider to “choose” from, if UnitedHealth withdrew from every ACA exchange. According to this analysis, “the impact could be significant in some areas, particularly in rural areas in Southern states.”
The Associated Press notes that some other big insurance players, such as Aetna, have reported heavy losses from the ACA exchanges, and are expected to “trim their exchange participation in 2017.”
“A dozen nonprofit health insurance cooperatives created by the ACA to sell coverage on the exchanges have already folded, and the survivors all lost millions last year,” the AP adds.
The Hill relates Obama Administration efforts to spin the UnitedHealth disaster by arguing that despite its status as the nation’s largest insurance provider, and its expansion to 34 states, it was a “fairly small player on the ObamaCare marketplaces.”
However, The Hill acknowledged that some of the much larger players, including Blue Cross Blue Shield, “have also raised the prospect of dropping off the marketplaces.”
Some of these providers have made it clear that only substantial premium increases – which taxpayers will be looted without mercy to subsidize, so ObamaCare enrollees don’t panic and drop their coverage – will keep them in the program.
The AP also reports that the Administration is planning to rewrite the Affordable Care Act yet again, presumably through regulatory fiat or executive orders, to make it harder for customers to “sign up for coverage outside regular enrollment windows and then dump expensive claims on their books.” UnitedHealth evidently didn’t want to stay in the game for another year to see how that new adventure in hyper-regulation worked out.
The Department of Health and Human Services released a statement yesterday declaring its “full confidence” that the ObamaCare marketplaces “will continue to thrive for years ahead.”
UnitedHealth, at any rate, will thrive now that it’s casting aside the ObamaCare albatross. The rest of Hemsley’s earnings call was upbeat, with Forbes reporting first-quarter earnings that “overshadowed its retreat from public exchanges under the Affordable Care Act.” The AP adds that UnitedHealth shares jumped 2.2 percent in morning trading.
In other words: a gigantic health insurance company that is turning a handsome profit in its other product lines decided to drop its relatively small ObamaCare business, because it was losing far too much money to sustain, and investors rejoiced at the news.
The greatest walking-dead public policy disaster of the modern age shambles along, waiting for a few more big insurance providers to shoot it in the head, and put it down for good.
Update: Senator Ben Sasse (R-NE) swiftly responded to the UnitedHealth announcement: “This isn’t about spreadsheets and quarterly reports – it’s about the President’s broken promise that families would have more choices under ObamaCare. This year, in 36 percent of the nation’s counties, families could pick between only one or two insurers on the exchange and, given today’s news, next year looks like it could be even worse.” source
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