As it stands, there are only a handful of established health insurance companies that participate in Obamacare to start with. The co-ops are flatlining, and the tiny players created by Ocare are likewise having issues. Other big companies have dropped out, are considering dropping out, or are looking to reduce their participation.
(Fox News) The nation’s largest health insurer, fearing massive financial losses, announced Tuesday that it plans to pull back from ObamaCare in a big way and cut its participation in the program’s insurance exchanges to just a handful of states next year – in the latest sign of instability in the marketplace under the law.
UnitedHealth CEO Stephen Hemsley said the company expects losses from its exchange business to total more than $1 billion for this year and last.
Despite the company expanding to nearly three dozen state exchanges for this year, Hemsley said the 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.
UnitedHealth Group Inc. said it now expects to lose $650 million this year on its exchange business, up from its previous projection for $525 million. The insurer lost $475 million in 2015, a spokesman said.
Don’t feel too bad for United for the losses, as they were big supporters of the terrible law going back to pre-passage. Feel bad for the people who want affordable health insurance. Of course, so many of them cannot actually use the insurance for a lot of things, since they cannot afford to use it, due to the deductibles, along with the restricted networks.
A big part of the problem is the number of high-risk enrollees. The Exchanges are not seeing the number of healthy signups they need. UHC has already left some Exchanges. Humana bolted. Aetna and Blue Cross Blue Shield have made noises about leaving the “Marketplace”.
This is all unsustainable as established, just like people said before passage. It still polls negatively. The next step, of course, is for liberals to push for single payer, proclaiming that if the insurance companies cannot “do their job”, then the federal government should take over.
Crossed at Right Wing News.
Our esteemed host wrote:
But the insurance companies are doing their jobs! The function of an insurance company is not to provide health insurance; the function of an insurance company is to make money for its shareholders, and selling insurance is simply the tool that they use to perform their primary function.
UNH was making money, with its Obysmalcare business a small part of it’s total package. UNH is simply excising a money-losing segment of its business, in an attempt to become more profitable. UNH closed at $130.50, up $2.69, or 2.10% yesterday, as investors saw the wisdom of this move.
Our host wrote:
Virtually all of the health insurance companies were supporters of the law, because they saw increased sales in their futures.
Prior to the law, insurance companies had to compete not only with each other, but with the potential choice of not buying insurance at all. The law removed the option — well, sort of — of not buying health insurance, which meant that the insurance companies no longer had to compete with the non-buying option. This (should have) meant that insurance companies would see increased sales without the need to increase market share. They saw the obvious example of automobile insurance, where rates are high because vehicle owners do not have the option of not buying insurance.
Well, it hasn’t worked out the way they had hoped, for a variety of reasons. Now, to remain in this market, insurance companies will need double-digit percentage rate increases, and they are going to get them: states will be seeing insurance companies taking the UNH option, of either getting the price increases that they need, or simply pulling out of the Obumblecare markets entirely. State regulators will soon see that, without the increases, their citizens won’t be able to get health insurance at all, so they’ll be forced to cave on the increases.
[…] William Teach on The Pirate’s Cove: Surprise: United Health Care To Cut Most Participation In Obamacare […]
As one who bills United Health and one who uses that insurance, I can’t understand how the company can lose anything, they don’t pay crap.
Once the Dems control the White House, the House and Senate, all that will be left of Obamacare will be the name. The insurers know this as well. Once the public option was knifed by conservatives, this was fait accompli.
Obamacare will be transitioned to a single payer system, of which the private insurance companies MAY play and HOPE to play a role. Some European nations use a mixed public/private approach that works well (e.g., France).
Just like gay marriage, a single-payer, universal healthcare system is coming your way. US conservatives always throw up roadblocks but they always get run over (except for the metric system, you won that one).
-the little guy who exaggerates often and forgets a lot of the recent past
They were in control and they were warned that Obamacare was unsustainable but all the little ‘Gruberites’ yelled ‘Free Health Care! YEA!’ and anyone who had any common sense that was against it was a ‘right wing racist nut job’.
Well, guess those old meanie right wing racist nut job Republicans were right.
jeff incorrectly wrote: “Once the public option was knifed by conservatives, this was fait accompli.”
Wrong. Per the Washpo, A handful of Democrats, led by Sen. Ben Nelson of Nebraska, made clear that if there was a public option, they would filibuster the final bill.
Further, from Huffpo, Quoting Democrat Russ Feingold, “Unfortunately, the lack of support from the administration made keeping the public option in the bill an uphill struggle.”
The public option was knifed by democrats and Barry Obama. The same Barry Obama who campaigned in support of the public option.
Jeffrey wrote:
We already have a single-payer health care system, two of them actually, in Medicare and the VA Hospitals. If you are on Medicare, you’ll need to buy a supplement, because Medicare won’t pay everything, and we’ve all seem how the VA has been doing, under the table, the same thing that Canada and the United Kingdom do openly, and that’s drag out care in attempts to save money.
Unfortunately, Jeffrey is probably right: we’ll eventually have a single-payer health care system. Trouble is, it will be a crap system, like it is in all of the larger countries where such exists.
Jeff,
I actually agree with you, once the Dems get control our country will continue the road down hill and over the cliff. One of the things that foreign travel does is to expose you to the way others do things and the consequences. I saw Europe in the fall and it was obvious that the people were suffering from the burden of tax being paid for health care and other liberal projects. Their economy was in ruin and they were under the thumb of an invasion of out of control immigrants. Then I just visited Korea. There you pay before being cared for. I am sure that they have some socialist structure, but like ours their is always a short fall, but they have no problem with actually paying for the care they receive. In fact, they have no problem with money. THEY LOVE IT. I envied them as they had a strong national bond, felt pride in their industry and wanted more. There moral code precluded accepting tips!!! And, I found that the US is a solid third world country after seeing all the technical innovations, clean cities, lack of crime, and all the other things that we long for but can not have due to liberals.
Mr. M.,
Ben Nelson is a conservative.