Nation’s largest health insurance company wants out of Obamacare


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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.

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3 comments

  • Jamie Menzing

    United Healthcare was all in for Obamacare. Only after they started losing money did they cry foul. I’d let them out if all executives had to spend a year in jail as a condition.

  • Wayne

    Jamie Menzing wrote in part: (referencing United Healthcare executives)

    “….spend a year in jail….”
    ——————————————
    >Only a year? (smile)
    ——————————————
    It’s more insidious than it appears. You are absolutely correct United Healthcare was 100% in the tank for having the Federal Government force people to buy their products. It’s pure FDR era cronyism & rigging the insurance market ala “collectivized Cartels.”

    From the Washington Examiner article:
    [“The year 2017 is significant for insurers, because that’s the year when several programs designed to mitigate risk for insurers through federal backstops go away.”]
    —-This is a reference to the “risk corridor” embedded in the ACA, wherein the Feds would massively, although temporarily, subsidize insurance companies directly for the people buying policies on the so called “exchanges,” through the back-end. Which is separate from the subsidies the Feds would pay on behalf of participants who purchased insurance in this method, on the front-end.
    —-United Healthcare wants out of the “insurance exchange product segment,” which is a relatively small portion of the entire market, & the one we have been lectured about endlessly, the alleged 5-10-20-30 million (an ever changing target & made up number) who “didn’t have insurance.”

    Vast majority of folks however don’t access insurance via the exchanges, they get their health insurance through employer’s. It’s the very same people Obama claims he was helping (the “uninsured’) who would be left in the dust.

    The Feds stopped just short of actually collectivizing (nationalizing) the entire industry 100%– the “single-payer” goal that underlies the ACA. But in effect, have done so with their regulatory power to dictate the specifics of every policy.

    None of these insurance companies stood up & said, “This won’t work.” They saw the writing on the wall & decided to actively collude with the Feds, hoping beyond hope they could survive & with an eye toward past history, where the republican leadership would eventually step-in & somehow “manage the situation better” than the democrat party.

    In the meantime, 16% of the entire economy is effectively controlled by the Feds with a phony veneer of “marketplaces” & “choice.”

    Unfortunately, nobody has ‘broken the Law,’ and nobody is actually able to be held accountable, except politically via elections.
    Tangentially– we are now being force-fed an individual who loves making “deals,” and appears perfectly willing to “manage” the situation “better,” while still keeping the control in-place.

  • Edward

    Robert wrote: “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.”

    As one who chose the “junk” insurance (back when we were free to choose), as it is the very type of coverage that insurance is supposed to be used for, it is clear to me that government is not the solution but is the problem. The imposed mandate to purchase unaffordable insurance has turned me into a scofflaw. I see that as yet another problem.

    [Non-rhetorical question — I truly want an answer] What other tyranny has had the audacity to direct its subjects as to how to spend their own money? We have lost our freedom to this tyranny.

    Welcome to Obama’s America, land of the formerly free.

    Wayne wrote: “It’s the very same people Obama claims he was helping (the “uninsured’) who would be left in the dust.”

    This is why Big Government does not work. Either the “social engineering”/problem solving comes from idiots who fail to understand/ponder the consequences of their legislation, or it comes from people who have ulterior motives — usually a thirst for money or power (when there is a difference).

    It is even worse than you think, Wayne. I am one who once was insured, but chose to become illegally self-insured (uninsured) due to the high cost of Obamacare. Even some of the insured have already been left in the dust.

    By my calculations (but the insurance benefits are confusing), I break even if I have a $22,000 or $27,000 medical bill.

    Wayne wrote: “In the meantime, 16% of the entire economy is effectively controlled by the Feds with a phony veneer of ‘marketplaces’ & ‘choice.'”

    This is what fascism is all about, control of the nation’s businesses and crony capitalism (banking and much of the auto industry have likewise been taken control by the national government). Plus, the administration has set policies in place to punish companies that complain about Obamacare — another aspect of fascism.
    http://www.dictionary.com/browse/fascism
    We currently have fascistized medicine, but they want to give us Canadian-like socialized medicine in the near future (I include Trump in the “they” category, as he has opined that it works and Obamacare doesn’t).

    What worked was the previous somewhat-free-market system, where I could afford the catastrophic insurance that I like.

    My preference is to repeal Obamacare, not replace it, and allow free market forces to force down prices while encouraging insurance plans that people want to buy. Even the over-regulated system that we had in 2009 was far, far better than this abomination.

    With Obamacare, I am without health insurance for the first time in my life. Even the last time I was unemployed, I purchases insurance — but it was affordable, back then, had much, much lower deductibles, and no co-pays. Thus, Obamacare has had the opposite effect it was advertised to have (in many other ways, too).

    Which reminds me; since Obamacare was supposed to ensure that everyone was insured, why is the Obama administration projecting *any* numbers for people who will be uninsured? Clearly, the administration is admitting that it and government are complete incompetents.

    Wayne wrote: “Unfortunately, nobody has ‘broken the Law,’”

    I’m not so sure. The health insurance companies’ officers and directors have fiduciary responsibility for their shareholders, and if they were advocating or encouraging legislation that they thought was possible or likely to result in financial trouble for their companies, then they have broken that legally-binding trust.

    Unfortunately, there is no similar responsibility for government officials. If the bureaucrats intentionally write bad law and the legislators and executive make it into law, they are all exempt from legal responsibility. We can vote new elected officials into office, but the bureaucrats remain in place, unpunished for their bad behavior.

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