UnitedHealth, America’s largest health insurance provider, says it will exit from most ObamaCare exchanges next year, citing more than $1 billion in losses.
CEO Stephen Hemsley says his company “cannot continue to broadly serve the market created by the Affordable Care Act’s coverage expansion due partly to the higher risk that comes with its customers,” as reported by the Associated Press.
The announcement came after UnitedHealth revised its projection for 2016 to $650 million in losses, up from a previous estimate of $525 million, after ending 2015 some $475 million in the red.
As the AP tells it, UnitedHealth had “second thoughts” almost immediately after announcing it would expand participation from four state exchanges to 34.
As of last November, the company was debating a complete exit from all ObamaCare exchanges, but has apparently decided to remain active in a “handful” of states, which Hemsley did not specify in his conference call to report company earnings. It has already been announced that the company was pulling out of Arkansas, Georgia, and Michigan.
The Washington Post cites a Kaiser Family Foundation study that estimated about 1.1 million ObamaCare customers would be left with a single insurance provider to “choose” from, if UnitedHealth withdrew from every ACA exchange. According to this analysis, “the impact could be significant in some areas, particularly in rural areas in Southern states.”
The Associated Press notes that some other big insurance players, such as Aetna, have reported heavy losses from the ACA exchanges, and are expected to “trim their exchange participation in 2017.”
“A dozen nonprofit health insurance cooperatives created by the ACA to sell coverage on the exchanges have already folded, and the survivors all lost millions last year,” the AP adds.
The Hill relates Obama Administration efforts to spin the UnitedHealth disaster by arguing that despite its status as the nation’s largest insurance provider, and its expansion to 34 states, it was a “fairly small player on the ObamaCare marketplaces.”
However, The Hill acknowledged that some of the much larger players, including Blue Cross Blue Shield, “have also raised the prospect of dropping off the marketplaces.”
Some of these providers have made it clear that only substantial premium increases – which taxpayers will be looted without mercy to subsidize, so ObamaCare enrollees don’t panic and drop their coverage – will keep them in the program.
The AP also reports that the Administration is planning to rewrite the Affordable Care Act yet again, presumably through regulatory fiat or executive orders, to make it harder for customers to “sign up for coverage outside regular enrollment windows and then dump expensive claims on their books.” UnitedHealth evidently didn’t want to stay in the game for another year to see how that new adventure in hyper-regulation worked out.
The Department of Health and Human Services released a statement yesterday declaring its “full confidence” that the ObamaCare marketplaces “will continue to thrive for years ahead.”
UnitedHealth, at any rate, will thrive now that it’s casting aside the ObamaCare albatross. The rest of Hemsley’s earnings call was upbeat, with Forbes reporting first-quarter earnings that “overshadowed its retreat from public exchanges under the Affordable Care Act.” The AP adds that UnitedHealth shares jumped 2.2 percent in morning trading.
In other words: a gigantic health insurance company that is turning a handsome profit in its other product lines decided to drop its relatively small ObamaCare business, because it was losing far too much money to sustain, and investors rejoiced at the news.
The greatest walking-dead public policy disaster of the modern age shambles along, waiting for a few more big insurance providers to shoot it in the head, and put it down for good.
Update: Senator Ben Sasse (R-NE) swiftly responded to the UnitedHealth announcement: “This isn’t about spreadsheets and quarterly reports – it’s about the President’s broken promise that families would have more choices under ObamaCare. This year, in 36 percent of the nation’s counties, families could pick between only one or two insurers on the exchange and, given today’s news, next year looks like it could be even worse.”
This is what has been predicted all along by Obamacare opponents.
Not that I expect anyone in the public arena supporting and pushing it to admit it to those they deceived to get it passed.
And, I’m sure most or all of the left will blame it on greedy insurance companies, not themselves, for creating the situation.
But Hillary says we need more Obamacare.
Bob.
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The irony is the people getting huge subsidies, free Medicaid or can hop onto a plan when they get really sick love the plan. Everyone else, not so much. I wonder when the states will start to blow up with the increased Medicaid costs as the Federal government scales back the Medicaid subsidy in the next few years.
Bob.
Two brief observations:
I have a sense that this is all going according to plan toward single payer. Remember it was the insurers themselves, along wiht the AMA, Walmart, AARP and other left leaning entities that wanted this mess to begin with. As the likes of UHC depart the folks who saw a ‘free trinket’ being waived in their face are going to look right back at gubmit to come and save them from a forming crisis. This story is far from over.
Second observation – pay close attention to what Colorado is proposing as a STATE CONSTITUTIONAL AMMENDMENT to have gubmit provide single payer health insurance to near 85% + of its residents. This is meant to be a substitute for the failed state health insurance exchange that went down in smoke and flames last fall. Look up ColoradoCare and see it for what it is. I suspect without awareness the lefties will be pushing this thing hard in preparation for the Novemenber election and if passed only to see productive residents and businesses pull out due to a huge increase in the tax burden. Reports have it that a 10% increase in state income tax is needed to fund this millstone 3.33 % from employees and balance coming from employers that would make CO the highest taxed state in the nation. Forget the weed tax – this thing will gobble up increased weed revenue and folks will vacate.
“Colorado – the state is high, but you don’t have to be high to live here. Oh… wait…. yeah, you do have to be high to live here. Duuuuuuudde…..”
@rj chicago,
I agree with you; this shit-fest was designed to fail in order for people to cry out for a solution, which will be single payer. Ta-da!
by Karl Denninger
It’s Starting
I’ve warned everyone who has read this column continually since 2009 that we are on a short leash, roughly a decade long (from 2009), on the impact of health care inflation, monopoly and anti-competitive behavior before it blows up our economy and government.
That is a civil-defense siren you hear and it is not a drill:
The nation’s largest health insurer, fearing massive financial losses, announced Tuesday that it plans to pull back from ObamaCare in a big way and cut its participation in the program’s insurance exchanges to just a handful of states next year – in the latest sign of instability in the marketplace under the law.
UnitedHealth CEO Stephen Hemsley said the company expects losses from its exchange business to total more than $1 billion for this year and last.
There is no solution to this problem found in “reform” of the insurance market.
You can only resolve this but cutting the snake’s head off, and that can be done using existing law.
If we do not do it then we face the outcome that I put forward in this Ticker several years ago.
This is not politics, it’s arithmetic.
I welcome a discussion with those in the policy arena, irrespective of political party, that are willing and able to have a frank discussion of facts, using the US Treasury’s own figures and our existing body of law.
I’m easy to contact (look to the right) and my position on this, along with the facts and figures, have been self-evident and consistent for two decades.
It’s time to cut the crap, if we’re going to, before that sounding siren is obliterated by incoming events.
Gee, I just can’t wait for that single payer system.
SARCASM ALERT!
My husband retired from USAF with a service connected disability rated 20%. That doesn’t mean a second “check” for my husband; it just means 20% of his retirement pay is nontaxable.
But what it means is that the VA is responsible for the cost of treating the condition that is service connected. Since we use the Miitary’s Tricare Insurance option for retirees, it really hasn’t been an issue until we moved to another state and thus, a new Tricare Region.
Now, in order for the VA to pay for my husband’s medication, Nick had to see a VA doctor here in this region. Every month for the past year, Nick has had to call the VA nurse and tell her that he is NOT supposed to get charged for his medication to help him sleep and combat insomnia because the condition is service connected. And every month, the VA removes the charge and promises to update his record so he won’t receive a bill again.
Nick had his “changeover” appointment last March. He got his first prescription last May from the VA. So, he’s called them eleven times, getting snarkier and meaner with each call. Today, I heard him yelling at the phone while I was working in the garden. He said “No, YOU look it up in my records. I’m a retired VETERAN. You are there to serve ME.”
I was rather impressed that it only took him a YEAR to get this angry.
Single Payer System: VA Medical
I’m sure this government can run a country wide system JUST AS WELL.
I’d like to say I’m surprised, but I’m not. Thanks TBP.
The insanity grows by the day. Single payer on the horizon with rationed healthcare as a solution.
KD can’t be serious about an exiting law, these Marxist have sweat blood for fifty years to create this mess, it won’t go quietly into that good night. Single payer will strip down the incomes of healthcare professionals and dictate the pricing of services. Doctors will be driving used Hondas and living in average housing so look for most of them to quit. Doctor Habeeb steps in to fill the vacancy and then true government healthcare will be in place.
Americans are getting what they deserve.
Some how – us people who have health care – and pay for it – will take it up the ass o this one too.
@Ghost: I agree the VA system really sucks, but Seniors mostly give kudos to Medicare, the bigger “single-payer” system. A “Medicare for all” system could replace both the VA and Obamacare and the system is already in place and working.
We need to get the private insurance companies out of the healthcare business. So long as CON-gress gets the pork from their lobbyists, we’ll continue to suffer through this mess.
This quote applies to a lot of things these days:
Coaster- You are a hopeless case, Jeebus h. Krist.
Don’t come in here crying the blues down the road that you were denied services or got yourself stuck on a 9 month long waiting list for an operation.
“Single payer” systems throughout the socialist world are collapsing under their own weight (cost) and providing increasingly abysmal care compared to ours. This is why everyone there that can afford it comes here for elective treatment of anything not needed immediately to stay alive (where they really have no choice).
” A “Medicare for all” system could replace both the VA and Obamacare and the system is already in place and working.”
OK Westcoaster, lets see some real world financial data on how that will work.
Note that I said real world, not imaginary, something that can actually be analyzed and discussed.
But you’ve been asked before, repeatedly, and never provided any so I don’t expect that you will this time either.
FWIW, Medicare is only paid for by those working and those who have worked and paid for it during their working lives, not the freeloaders that you would have fill the system (which is what is killing Obamacare now).
Westcoaster is right — Medicare for all seems to be the only viable alternative if cost control is the ultimate goal.
Bea Lever is right — Service levels and quality would go to hell in a handbasket under a Medicare for all system. And right again you are, that many providers will try to jump ship — but into what? Very few patients will be able to pay what they want to charge.
This is a rubber-meets-the-road situation — the truth is, we can’t afford the current healthcare system anymore, and we are about to stop paying for all of it.
Bob,
Rationing is the answer, like they do in England (and on top of long waiting lists and abysmal care as well).
You’re past a certain age or in a certain economic group, you don’t get care beyond the minimal.
Look up the CMS website. It already says Centers for Medicare and Medicaid Services.
I would expect the federal government to pass a Save Healthcare Act in 3 to 5 years, that would merge Medicaid and Medicare into a defacto single payer. Its possible that people on commercial plans would be given the voluntary option of joining as well. In 3 to 5 more years, it would end up being mandatory for all slav…. I mean Americans.
Of course, the standard of care would be the …. cough cough….. high-quality VA care.
Medicare/Medicaid is for all intents and purposes broke and continues to get broker every year. Without true market reform these systems will spend themselves out of existence. Westcoaster, I would say something derogatory, but I will leave it at the fact you are very poor at math and quite an advocate on letting the government spend other peoples money. When the government starts reducing the bribe it used to sell extending Medicaid to the states and reduces the subsidy or even worse goes to a blended rate many states will be bled dry. It is already nearly $20 trillion in debt not accounting for future liabilities. It will have to print its way out of the mess it created and we know how that end. The peasants will get crumbs and the king and his minions will look down on us and laugh.
Bob.
@Westcoaster… you can’t sell me that load of crap. I just went through the Medicare gammut with my father-in-law for almost two years, rest his weary soul. It’s a big stinking GAME and everyone involved (doctors, nurses, physical and rehabilitation therapists, nursing assistants, nursing aides, even the janitors) at the revolving door to elderly care/rehab/nursing homes are playing the game except for the patient..
The only person with any real stake in the game is the patient and they haven’t got a chance of even learning the rules before they reach their time limit and get shifted helter skelter on to the next phase of the Medicare titsucking game played by elderly care medical community, rehabilitation paid for by Medicare (4 weeks, then it’s out the door), elder care with assistance or nursing home care, where the patient falls and has to be rushed back to a hospital which starts the Medicare clock ticking at zero.
We finally convinced Poppa that he had enough money to pay cash for his care. We told him we didn’t expect to inherit anyway.
.
Listen to Mia Marie Pope’s testimony, for those of you who’ve not yet done so… it may reveal the real picture of who this man Hussein is.
Remembering Obama’s Days As A Gay, Cocaine-Using Hustler-Three of O’s lovers murdered to hide the truth
Time to turn backs on politicians and Secede from the corrupt satan’s mongrals
Medicare allows the doctors, rest homes ect to milk Medicare for money by slowly killing patients over time. Getting payed while doing it. It is all a scam for money. They deny some meds that may help but allow others to ease suffering and prolong it too. The Doctors don’t even see the patients when issueing orders the majority of the time depending on the nurse who is overburdened with patients to help profits due to the small payout of Medicare.
Oz has one of the best single pay systems in the world. However, if you want immediate care you better have private supplementary insurance, which costs around $8k per year. Otherwise you can wait for years to be seen. But, hey, at least it is almost free, just s long as you survive long enough to get the care you need.
Single payer sucks.
@Bea: Okay, then what’s YOUR solution, because Obamacare ain’t cuttin’ it.
@Ghost: Sorry your Dad has been given a hard time, and I know it’s frustrating to maneuver through any system; it should be very simple and easy with a single-payer system that cuts out all the red tape. Maybe you should hire an “elder advocate”; someone who knows the system and how to work it.
On another hot topic, I saw this & wanted to share with all the skeptics:
http://www.maxkeiser.com/2016/04/miami-is-a-goner-but-it-wont-happen-incrementally-but-all-at-once-during-a-cat-5/
Llpoh- Could you try to explain this to Westie, you have a better way with words. He thinks he is a Libertarian to boot.
I’m convinced his parents signed him up for those extra heavy duty fluoride treatments back in the late 50”s.
Obamacare is a huge and obvious failure. That does not mean it will be reduced, reconfigured, or eliminated. Folks, this is Washinton we’re talking about, where nothing succeeds like failure. Obamacare will receive increased funding and a bigger mandate; that’s how Washington deals with failure. Three examples: the War on Poverty, the War on Drugs, and the War on Terrorism. Obamacare or some successor fiasco will be here long after everyone on this site is pushing up daisies.
It’s like an Orwellian dream. Except we won’t wake up…
So Leftcoaster thinks in order to get promised govt health care the citizen needs to hire an advocate. Sweet.
Seriously, you cannot make this shit up. Fuckwit lefties build layer upon layer upon layer of incompetence.
Govt system does nor work? Hire an advocate to help you. That does not work, hire an advocate to help the advocate. Idiocy at its finest.
He govt has no business running or being involved with or paying for healthcare. It will not work, and it is going to end in complete economic suicide.
That healthcare ever came to be seen as a “right” is one of the great cons ever perpetrated on the people of the world. It has opened up an endless financial liability that simply cannot be met.
What is it going to take to get rid of this POS legislation already?
Robert Gore – umm, no. There will be a total financial implosion some day, resulingin a reset. Many here will need live to see it. It could happen soon, or not, but it is coming.
Westcoaster,
The solution is to pay your own way and have insurance only for catastrophes. This is how you do it with your car. Repairs out of pocket, and insurance kicks in if you get in a wreck.
Go to the vet sometime. You can get an exam plus x-rays for about $100, at least where I live. Try that with your doctor.
The reason shit is so expensive is because of insurance; a high-overhead, unnecessary middleman.
I can’t understand how anybody can think that:
1) Something can get MORE affordable by adding bureaucracy
2) An agency that has NO accountability, and NO incentive for efficiency is the way to go
Think free market.
Leftcoaster – btw, what the fuck do I care if Miami and, hopefully, the whole of CA, save for those that read TBP, sinks immediately and suddenly into the sea?
Do not live by the frigging ocean is one of the best bits of advice so as to avoid natural disaster. Hurricanes and tsunamis do not tend to hit, say, Denver.
I thought I was the only squirrel in the tree a decade back, when I said that health insurance should not even exist, and is the single biggest cause of the deterioration of our health care system, and the massive inflation in health care costs. One woman I know, a banker, ruefully agreed I might be right.
Then, David Stockman said the same thing in THE GREAT DEFORMATION. He points out that medical insurance was only invented in WW2, when wages and prices were frozen, and companies competing for executives offered it as a benefit, in order to circumvent wage and price controls. The result was rapidly inflating medical costs, which drove more people to buy insurance, inflating costs still more. By the 1960s, medical costs were out of control and you could no longer “self-insure” and get treatment. I remember an ad in TIME magazine that showed a car wrapped around a tree, and the copy “Can you afford to survive this accident?” Basic medical insurance was a common benefit for even low-level jobs.
By the 1980s, insurance costs were out of control, and some genius invented “health maintenance organizations” which would cover ALL the insured’s health needs, right down to yearly checkups, and visits to the doctor to get common vaccinations and routine checkups. People began to take their kids in every time the child turned red in the face, since the visit no longer had to be paid for out-of-pocket. Soon, HMOs were confronting soaring costs, and had to change their policies. HMO membership became vastly more expensive, but most people employed by large corporations that got extremely favorable rates for their large groups did not notice. However, those who had to buy individual plans, such as employees of small businesses, independent contractors, or small business owners, were finding themselves unable to afford coverage.
The simple fact is that you cannot insure against things that are inevitable, such as illness, injury, or the process of dying, which last event accounts for most of the medical bills most people will run up in their lifetimes. Insurance only works for things that are relatively rare events, which is why you can’t get car insurance at any rate near being affordable if you’re an accident-prone drunk with two DUI convictions who wrecks every car he acquires.
Consequently, insurance has turned our medical care into a financialized scam where you will pay as much for your insurance over your working life, as you would for the same care if you paid out of pocket up front, sans insurance. I pay $312 a month for a plan that covers serious events only and that has a deductible of $12,000!
If insurance did not exist, care providers would have to price their services according to what patients could afford to pay out of pocket, a fraction of the cost billed now. Care would, of course, be more “bare bones”, and there would probably be more “triage” of patients who have no chance of benefiting from extensive treatment, such as people 80 years old with stage 4 cancer. But there is ample evidence that too much “care”- i.e. too much treatment in the form of surgeries and medications, has probably done more to damage our health than improve it.
We’re self-employed. Our health insurance is $1,250 a month for three healthy people. How many people can afford that? In many areas, that’s more than a house payment.
ObamaCARE (death panels). The AFFORDABLE Healthcare Act ($5k deductables). Troubled Asset RELIEF Program (TARP = taxpayer bailout of corrupt bankers). COMMON Core (making our kids stupid). The War on TERROR (Patriot Act).
Like Orwell said:
“War is peace.”
“Freedom is slavery.”
“Ignorance is strength.”
Got it?
gxg
A few of my clients tell me they are paying $1,750 per month for a family of four. That is shameful to rob these people and call it “affordable”. I would personally pay the penalty but I understand not everyone could do that.
I am self-employed and we pay $1200/month to cover a family of four. Three of us are on a plan with a $12,000+ deductible, the fourth is separately on a plan with more coverage but costing $500/mo just for that one person. We will spend $15,000 for the year if no one gets any medical care whatsoever. With minor and routine care, maybe $17,000. If a worst case scenario happened (two or more people very sick), our total cost would be something like $30,000. Yes, this is an Obamacare-compliant plan, and the best we could find in our state.
Persnickety – that is truly despicable. I am sorry that is happening to you.
Bea Leaver – $1,750 per month for a family of four. That’s seriously crazy, isn’t it? How are people dealing with it? Do they have incomes to cover it?
For our family, the thing that really drives me crazy is that I’d voluntarily buy insurance. It’s just that I don’t want to pay the bloated costs dictated by Obamacare. We’re done having children. We don’t need birth control. We don’t have any substance abuse issues, etc. etc. etc. We’re lucky in that we can afford our insurance, but I can’t imagine how impossible that is for a regular middle-class family.
Persnickety — Those are some insane numbers, but yeah, it’s what this mess costs, isn’t it? Like, people are out a fortune BEFORE they see any benefits from this.
A serious question: How can regular people afford this? What do they do?
I wish we could still buy the old insurance, based on what you actually needed.
Obamacare isn’t a failure. This is entirely by design.
One of the key goals is to make private insurance so expensive, that the population practically begs to get on Medicare or Medicaid. And as stated before, Medicare and Medicaid will merge to form a defacto single payer system.
I believe the entirety of Wash DC has decided it wants to leave government service. In order to do so, they have decided to bankrupt the country, cause massive systemic breakdown of society, destroy coherence and stability in society, and when no one can afford to pay for the broken promises they made, blame us for their failures and try to leave town quietly for their bunkers, vacation homes, overseas villas, etc.
There will be no hiding place deep enough or sound enough; they will pay for their sins as they have demanded we pay for ours (and theirs).
@Westcoaster… both my Poppa G and my own father are dead, Poppa G thanks to Medicare and the elder care system killing him slowly as mentioned above and my own father thanks to VA non-care.
Oh, and by the way? I did call an advocate from the Disabled American Vets, who made a few phone calls and got nothing accomplished.
Now, we get requests for donations to DAV almost daily.
I don’t understand how insurers could be losing money. The freaking premiums increased 300% and they don’t pay squat!
We have ACA and can’t afford to go to the doctor (better off anyway), no vision plan, no nothing but “out of pocket” and “deductibles”…………
The emperor’s new healthcare………….
Llpoh – thank you. My business is different from yours and my income is lower, but I’m still in the bizarre position of making an income (1) higher than anything I imagined as a teen or even college student, but (2) not high enough to actually provide a standard of living beyond upper middle class, or what 90% of my school-age peers had (I didn’t at that time). My tax bill is outrageous and I know that I’m basically supporting one or two other random families, probably of deadbeats, in addition to my own family. We regularly think about whether we could shrink our income and qualify for all those free bennies. Right now that doesn’t make sense, but maybe it will some day. It’s not what we want, but being perpetual victims of armed robbery isn’t what we want either.
The thought of expatriating has occurred to us and been thoroughly examined, and for our personal goals doesn’t seem to make sense.
Ahhhh, everything is going exactly as planned.
What the General said.
There will most likely be a private market for healthcare as Lloph describes in Australia. The entire health insurance industry is boiling down to a single-payer Medicare-like system. The momentum in that direction is accelerating.