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Note: This post was supposed to be published in November, 2015. I just discovered that it had not done so. Though late, the news it contains is still current and important, so I am publishing it now.
Finding out what’s in it: The nation’s largest health insurance company is considering pulling out of the Obamacare exchange because of cost and red ink.
The release added that, “UnitedHealthcare has pulled back on its marketing efforts for individual exchange products in 2016. The company is evaluating the viability of the insurance exchange product segment and will determine during the first half of 2016 to what extent it can continue to serve the public exchange markets in 2017.” The company said it expects “earnings pressure” of $425 million, which “is driven by projected losses on individual exchange-compliant products related to the 2015 and 2016 policy years.”
Insurers have had trouble signing up young and healthy individuals on the Obamacare exchanges, which is necessary to offset the costs of covering older and sicker enrollees. This has forced insurers to hike premiums, raise deductibles, and slash the number of doctors and hospitals offered on its plans. Meanwhile, the Obama administration has cut its enrollment expectations for 2016 to about half of what they were when the the legislation became law.
It appears that even if Congress does nothing, sometime around 2017 Obamacare will force the entire collapse in the health insurance industry. To stay in business under Obamacare, insurance companies have had to increase co-pays and deductibles so much there is increasingly little reason to have an insurance policy at all, especially since the premiums have also skyrocketed.
The biggest irony of all this is that all insurance is beginning to resemble those so-called “junk ” insurance policies that Obamacare banned, These were the inexpensive plans that provided few benefits except coverage for the costs coming from a catastrophic injury or sickness. Today, Obamacare is forcing all insurance to be like this, except that Obamacare has turned these once inexpensive junk policies into very expensive ones.