Posted on 11/20/2015 3:56:44 AM PST by Cincinatus' Wife
A threat by the nation's largest health insurer to pull out of ObamaCare is a sign of the industry's growing angst about the viability of the federal exchanges, sources close to the industry say.
UnitedHealthcare's warning sent new shockwaves across the healthcare sector after weeks of mounting anxiety among private insurers whose participation in the exchanges is critical to the viability of the president's signature law.
In the last month alone, insurers have learned that the Obama administration has significantly lowered its expectations for new customers and will have far fewer federal dollars to help cushion insurer losses.
"We've been very clear with the Administration about the serious challenges facing consumers and health plans in this exchange market," Marilyn Tavenner, the CEO of the powerful insurer group America's Health Insurer Plans, wrote in a statement. Leading insurers have already given strong warnings that the Obama administration needs to step up its funding commitment for companies that are still struggling with less-healthy - and therefore more expensive - customers. Some believe that Thursday's announcement by UnitedHealth could be an attempt to pressure the administration into action.
"All of the challenges they cited are real challenges and all insurers across the board are feeling as well," one source within the insurer industry said.
Experts say it's the clearest sign yet that ObamaCare exchanges remain weaker than expected after two years. It's also the latest warning from an industry that has been deeply dissatisfied by the Obama administration's rollout of the law since the beginning.
"I think [UnitedHealth] is legitimately thinking that things are - the risk pool itself - is worse than we thought. We're beginning to hear that a bit more," said Joseph Marinucci, a senior analyst with Standard and Poor. "There are still some open questions here. They still lack a measure of maturity."
The warning feels abrupt, coming less than a month after UnitedHealthCare projected solid growth in its ObamaCare plans. But it's also the culmination of a month of bad news for the healthcare law.
In a call with shareholders Thursday, UnitedHealthCare CEO Stephen Hemsley said the company was lowering its profit expectations by several hundred million dollars as a result of the grim outlook of ObamaCare plans. He said the company was taking a "proactive step" to halt the company's marketing of ObamaCare plans next year, and would evaluate whether to participate at all in 2017.
"As we see those markets actually being sustainable, we would be open to participating in them," Hemsley told investors, stressing that the company did not want to continue losing money. "We cannot sustain those kinds of costs and losses, and we will evaluate the marketplace as it goes."
The announcement - less than three weeks into this year's open enrollment - sent shockwaves across the marketplace. Within hours, stocks for major providers and hospital groups nosedived and multiple industry analysts began predicting a domino effect among other insurers.
"I think everyone is looking at this, like, 'Ok, here's a big guy pulling out. If anything they could have sustained these challenges and these losses, and they're not going to do it," the industry source said.
"Throughout the next year, companies will be looking to reposition. There will be shakeout, no question," Marinucci, the S&P analyst, added.
Hemsley's remarks are a reversal from the company's expectations given with shareholders just last month. But during that time, federal health officials announced a major blow to an ObamaCare program known as "risk corridors," which was designed to serve as a cushion for insurers facing larger-than-expected costs.
Insurers' demand for that pool of money has far exceeded the available funds, in large part because companies have contributed less to the program.
As a result, the Obama administration can pay out just 13 cents of each dollar that it owes insurers - threatening every insurer with plans on the marketplace, but particularly those with smaller reserves.
Congress has the power to address that shortfall, but GOP leaders have expressed no interest in authorizing more funding.
When making its projections on Thursday, UnitedHealth specifically cited the lack of federal funding available in the risk corridors program - the same problem that has contributed to the collapse of 11 startup state insurers known as "co-ops" in the last several months.
UnitedHealth also pointed to the tempered enrollment expectations from the Obama administration. Officials are hoping to sign up only 900,000 new customers this season, reaching a total of 10 million by next year.
The Obama administration has pushed back against the sharply worded statements from UnitedHealth.
"Today's statement by one issuer is not indicative of the Marketplace's strength and viability," spokesman Ben Wakana said in a statement.
Others within the healthcare sector shared the administration's view, chocking up the warning as a natural symptom the industry's adjustment to the sweeping law.
"American health care is undergoing significant change and evolution, and the health exchanges are part of that disruption," said Bernard J Tyson, Chairman and CEO of Kaiser Permanente, a non-profit. "While there have been challenges at times, we believe at the end of the day they are causing healthy disruption, and are forcing the health care industry to respond better to consumer needs."
Tim Jost, a professor of healthcare law and longtime ObamaCare supporter, added that UnitedHealth, in particular, has been cautious about the exchanges all along.
"I don't think it's a disaster," he said, noting that the insurer largely stayed out of the market in the first year and has come out of the exchanges in several states last year.
He pointed out that only a "very small chunk" of UnitedHealth's customers are on the exchanges - about 1 million of 50 million. He added that some movement of insurers is expected in the early years of a marketplace restructuring.
While other insurers have pulled out of ObamaCare plans because of financing concerns, UnitedHealth would be by far the largest.
"They come and they go. There's probably more going than coming, but it's not the end of the game yet," he said.
He is just angry because the minion Obamabots are supposed to go over the cliff, not turn around and run the other way.
Am I mistaken that this UnitedHealthCare is closely associated with AARP, which lobbied with the halfrican FOR nobamacare?
3 S’s, problem solved.
for later
Pay out just 13 cents of each dollar!
The only way to make money is to cut back healthcare.
The British and Canadians and other socialist countries do so with thousand dying that could have lived if given immediate healthcare. People who could get their knees or hips replaced are forced into a wheelchair while waiting and waiting for a doctors appointment.
The Daily Mail in the UK has had many stories on the horrendous conditions in the hospitals there and the death lists that have killed over 130,000 people per year.
YOU will be killed by the democrats to A) save “gov’t” money and B) because you are a conservative.
Top doctor’s chilling claim: The NHS kills off 130,000 elderly patients every year
http://www.dailymail.co.uk/news/article-2161869/Top-doctors-chilling-claim-The-NHS-kills-130-000-elderly-patients-year.html
Not for a minute!!!
The questions they asked expressed surprise, skepticism and outright alarm at his attitude and words. They asked the same question three times, as he complained, because they could not believe what they were hearing.
They had the proverbial moment of clarity, however temporary.
As I recall the idiot insurance companies for the most part supported nobamacare. Lots of laughs now, no?
I have already stated it in so many words. It is incumbent upon you to resist your profession’s own death by a thousand cuts.
What is merely voluntary or ‘best practice’ now will become compulsory with draconian punishments for the slightest infraction lest the political types have their statistics skewed by reality. You will become IRS agents in scrubs and stethoscopes, more concerned with patient compliance with tax law than with healing. This is why I included the Trotsky pseudoquote. Passivity and the Hippocratic Oath will do nothing to prevent your conscription into the People’s Army Of Socialized Medicine.
You say you can’t or won’t go on strike yet that very thing is occurring in the United Kingdom, home of the NHS, as I write this. Doctors (junior doctors, to be precise) are striking. I fully understand your stance but the strike, beyond hindering patient care, is another example of what will happen under government control. Medicine will become another public sector union, relying on militancy and threats.
Politicians rely on incrementalism to sap resolve. It’s easy to armchair quarterback, I admit, but resistance to the bureaucratic beast must be subtle but firm, widespread but quiet, polite but unyielding. Placards, signs, and marches for the benefit of the media and to impress the simple-minded are the tools of the left; they are propaganda, nothing more. If the truck’s gearbox is hindered or missing altogether then it cannot move. Question, challenge, and refuse when necessary. To paraphrase Caprain Kirk, find a reason and make it stick.
unexpected+drink bump
i wonder why kaiser is still drinking the obamacare koolaid
Exactly as planned. Single-payer is next.
Bookmark
I don’t care what they’re doing in Europe if they’re going on strike they shouldn’t be Dr’s or nurses. You cannot leave pts high and dry. Sorry but there are just some professions where you can’t do that, Firemen would be another example.
Now off shift, of course do what you can do, and I have. Quoting a tv character isn’t helping your rant sound any more intelligent.
Thanks for the links!
My rant? I thought it was a reasoned, thoughtful opinion delivered in the FR spirit of awareness of and resistance to government overreach. No profanity, no exclamation points, no shouting.
The reason I mentioned the NHS doctors was to address YOUR point that striking was impossible. This real-life, real-time example proves that it clearly is not. Your other example is also null and void, since there have been firemen’s strikes. ‘You can’t’ is a very different thing to ‘it has never happened and never will.’
Now what is more ‘intelligent’ - an acknowledgement of current events, their causes and their implications or a reliance on categoricals that have already been contradicted by history?
This contravention of your rhetoric seems to have angered you. I’m not sure why.
The Kirk quote was to provide a mutual pop culture touchstone a touch of levity to an otherwise depressing, serious topic in the spirit of FRiendship as we so often do here. You, apparently, aren’t having any of it and, like so many online, are irrationally directing anger and spite at a person you’ve never met rather than the issues and circumstances.
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