Posted on 11/20/2015 3:23:46 AM PST by markomalley
UnitedHealth Group's threatened exit next year from Obamacare raises a dark question that could determine the future of President Obama's healthcare law: Will other insurers follow suit?
It would be a sharp ding to Obama's signature healthcare law should the nation's largest insurer decide to stop selling plans through the law's online marketplaces. United said Thursday it is considering pulling out after the current enrollment season ends in January, citing major losses from the Obamacare plans.
"We cannot sustain these losses," CEO Stephen Hemsley said on a conference call. "We can't really subsidize a marketplace that doesn't appear at the moment to be sustaining itself."
United also made reference to the nonprofit insurance plans set up under the healthcare law to increase competition, called co-ops. About half of them have shuttered, citing financial woes to the dismay of the Obama administration and other advocates for the healthcare law.
But while United's exit would especially hurt consumers in states where it holds a large market share — including Nevada, Arizona, Texas, Missouri, Ohio and New York — the withdrawal of other big insurers from the Obamacare exchanges could mean more serious trouble ahead for the law.
United has sold plans to about 5.5 percent of the roughly 10 million Americans who use the marketplaces to get their insurance coverage, a relatively small market share, and is offering plans in 34 states this enrollment season.
But the company was relatively slow to participate in the exchanges compared with other insurance giants including Anthem, the company that operates Blue Cross plans, which dominate the markets in many states. Blue Cross plans insure 85 percent or more of Obamacare customers in Alabama, North Carolina, Vermont and Rhode Island, according to data compiled by the Kaiser Family Foundation.
All eyes in the coming weeks will be on the other big insurers such as Aetna, Anthem, Cigna and Humana, all of which watched their stocks fall dramatically falling United Healthcare's announcement Thursday.
"The concern would be if other insurers are thinking to themselves what United said," said Kaiser Family Foundation President Larry Leavitt.
Hemsley largely blamed his company's potential withdrawal from the marketplaces on some Obamacare consumers signing up for coverage and amassing big healthcare bills, only to later drop the coverage when they decide they can't afford it, leading to big losses for the plan.
After the Obama administration reported in February that 11.7 million Americans had selected marketplace plans, that number had fallen 15 percent by June, when officials reported just 9.9 million had continued paying the monthly premium.
Since enrollment has been open for only two and a half weeks, United doesn't have data on who will pay for it or not. But the company may have been pegging its hopes on stealing customers from other insurers that have sold on the Obamacare marketplaces from the start.
"I think what United might be able to tell from the first two weeks is whether they can grab market share from other insurers," Leavitt said. "They may be seeing they're not making inroads."
United's announcement put the Obama administration on the defensive, at it seeks to portray the marketplaces as a competitive environment where most people can get affordable coverage. Ben Wakana, a spokesman for the Centers for Medicare and Medicaid Services, noted that United holds a relatively small market share overall.
"Today's statement by one issuer is not indicative of the marketplace's strength and viability," he said.
And the administration pointed to a successful launch of open enrollment, which began Nov. 1 and has resulted in 1.1 million people selecting a plan in the first two weeks.
"The reality is we continue to see more people signing up for health insurance and more issuers entering the marketplaces, and at the end of January, we believe we'll be looking at another successful open enrollment — just like the last two," Wakana said.
Meanwhile, Republicans and conservatives who have predicted the Obamacare marketplaces would suffer from a lack of competition and fail to provide attractive, affordable options to consumers, cast United's announcement as evidence that their forecasts are coming true.
Rep. Fred Upton, chairman of the House Energy and Commerce Committee, called United "a very large piece of the Obamacare Jenga tower."
"It seems the news for the president's health law gets worse by the day, and the public is paying the price," Upton said. "With the many broken promises, growing rate shock and failed co-ops, the law is already on shaky ground."
It's not clear what piece of data led United to threaten to withdraw from the marketplaces, after it chose to expand into 11 additional states this year. But it's likely tied somewhat to the types of people buying the plans, as the marketplaces have struggled to attract as many young, healthy customers as insurers need for their risk pools to work.
And the problem will be exacerbated next year, when insurers that experienced big losses stop getting extra payments from several federal programs intended to cushion the launch of the marketplaces. That won't have a big effect on United, but it could on insurers that haven't received all the money they requested this year.
"They must have such bad claims experience that they now doubt they can ever turn a profit," said Brian Blase, a health policy expert at George Mason University's Mercatus Center.
Hemsley largely blamed his company’s potential withdrawal from the marketplaces on some Obamacare consumers signing up for coverage and amassing big healthcare bills, only to later drop the coverage when they decide they can’t afford it, leading to big losses for the plan.
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And who didn’t know that would happen?
After the Obama administration reported in February that 11.7 million Americans had selected marketplace plans, that number had fallen 15 percent by June, when officials reported just 9.9 million had continued paying the monthly premium.
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And who didn’t know that would happen?
And wasn't that Obama's plan from the start.... to force the people to beg for a single payer system and move us one more step towards complete Socialism?
Anthem is positioning itself to become the go between in a government mandated single payer system and the government is complicit. Crony capitalism strikes again.
If all of the insurers bailed, would we end up with the lib utopian "Single Payer System"? (i.e. Uncle Sam?)
The only thing unexpected here is that Obama had planned for the implosion to happen on somebody else’s watch.
Ooooops!
Obamacare was done with insurers’ buy-in, all as a big price increasing and control-taking scam against Americans. Just more Big Guv & Big Biz eating us cooked frogs.
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