Premiums are growing, and the Obama administration has once again missed their registration goals. Now the country’s biggest healthcare provider, UnitedHealth, is threatening to abandon Obamacare because it’s so poorly run. Is this the beginning of the end for the President’s plan?
UnitedHealth Group said Thursday that it is pulling back from its push into the Affordable Care Act’s public insurance exchanges only a month after touting future growth prospects for that business.
The insurer said it was cutting back on its marketing for 2016 coverage it sells in the exchanges, which collectively are a key element behind the ACA’s push to cover uninsured people. It also will decide in the first half of 2016 whether it will participate in the exchanges for 2017. Here are some key points behind the announcement:
WHY IS UNITEDHEALTH DOING THIS?
It’s losing money.
UnitedHealth expects to book an operating loss of slightly more than $700 million this year, largely from its exchange business. That includes advanced recognition of $275 million in losses it anticipates from next year, when it also expects to lose an additional $200 million to $225 million that it cannot record in advanced recognition.
DOES THIS AFFECT THE COMPANY’S FORECAST
UnitedHealth cut its outlook for 2015. It now expects earnings of about $6 per share. That’s down from its previous forecast for $6.25 to $6.35 per share.
CEO Stephen Hemsley told analysts that the company would have earned more than $6.40 per share this year if it had done no business on the exchanges.
WHY NOT QUIT NOW?
Open enrollment for 2016 has already started, and the plans are being sold, so it’s too late to quit for next year’s coverage. But it’s not too late for 2017.
The insurer said it will determine in the first half of next year whether it will continue to participate in the exchanges in 2017.
That gives it a few more months to see whether the business improves and if the government does anything to help improve life for insurers on the exchanges.
IS THIS A BIG CHUNK OF BUSINESS?
The insurer covers about 500,000 people. That’s a small slice of its total enrollment, which exceeds 46 million counting international business.
UnitedHealth Group Inc. sold coverage on only four exchanges for 2014. It then expanded to 24 exchanges for this year and is adding 11 more for 2016.
The insurer said as recently as last month that it expects the exchanges to mature into a viable growth market.
WHY IS IT STRUGGLING?
The insurer has been hurt in particular by customers who signed up for coverage outside the open enrollment window and use more health care in general than those who bought coverage during open enrollment.
Insurers expected challenges as they built this business over the past few years. They have been struggling, in particular, to attract enough healthy customers to their coverage to balance sicker patients who use a lot of health care.
WHO ELSE IS HURTING?
Several smaller, nonprofit insurance cooperatives said recently that they would stop selling coverage on the state-based exchanges.
Aetna Inc. said last month that its exchange enrollment fell 11 percent in the third quarter, but company leaders also said the exchanges remain a good market.
The Associated Press contributed to this article.
IF you can not build a WEB SITE how can you run health care??? Never mind he will do better fighting ISIS!!! Right???
Right and we can all keep our doctors too…RIGHT? How many more lies are coming? Many can’t afford this “Affordable Care Act” already and now getting bills for penalty for failure to pay after they jacked up pricing well over double! The turnip has not more blood to give!
Once again we see what happens when bureaucrats think they can operate a profitable industry. The Post Office should be enough of a reason for not allowing the government to run anything.
My husband’s health insurance went up an ADDITIONAL $450 per month and he’s retired. What’s so “affordable” about that?!? “Affordable” my a**.
if the government was in charge of selling sand in saudi arabia there would be a sand shortage someone once wisely quipped. how true.
it appears that the government is in charge of truth.
The problem is that only the sickest and least able to pay have signed up for “Affordable Care”. The system that they have cobbled together WILL NOT WORK. Other countries have national health care and it works well (the French system is very well thought of by all stakeholders, patients, doctors, hospital workers, etc.). Even the Canadian and British systems work better than Obama’s fiasco. It is essential though that all parties–those who actually utilize the system and those who work in it, have buy-in. The Obama system was apparently written by the insurance companies and they tried to ensure that they would receive lucrative profits as a condition of participation. How are they able to pay dividends if they are “losing money”? Healthcare SHOULD NOT be a profit-making operation. Profiteering off of sick people is a disgrace and takes advantage of the most vulnerable among us. I suppose the health insurance execs. could look at the absolute gouging of patients done by the pharmaceutical houses and say, “Well, at least we are not as bad as those guys!” But that misses the point that it should not be a profit-making endeavor in the first place!
The Republicans have fought health care from the beginning for reasons that can only be described a selfish stupidity. If they were really concerned about their fellow citizens they would have come up with their own plan years ago. To my way of thinking, every human deserves good health if we are to live up to our reputation of greatness.
We are a wealthy nation. No citizen should have to go without prescribed medication nor should they be denied health care including doctors and hospital stays. We spend billions of dollars annually helping other countries. Before we commit to massive foreign aid we should be taking care of our own. Especially our Senior Citizens. They have worked their entire life and deserve a decent retirement. The recent decision by those managing Social Security to not approve a cost of living increase (everything we purchase is rising in cost except gas) is deplorable. If we can help others in foreign lands as well as the illegal immigrants we continue to receive, we can do better for our own.
Has the world figured out yet, that any thing obama, pelosi, clinton, state dept. Does is bad? Does it take a rocket scientist to figure that out? Know this load and clear. Look at what has happened in the last 12 years. Traitors to the American people. We may have our battles, and prob will always have them. But to have a traitor is unforgivable.
To the best of my knowledge, the Republican Party has never done anything to improve the health and welfare of our citizens except cut taxes shoot guns. We need better education and health programs for everyone if we are to retain our reputation as the greatest country in the world.