Monday, November 23, 2015

United Healthcare losing money on Obamacare.

United Healthcare is preparing to throw in the towel on the Affordable Care Act as it is hemorrhaging money on the exchanges.  $700 million in the red is not exactly chump change, even in the Fortune 500.  The Wall Street Journal reported Friday: 


The biggest U.S. health insurer said it has suffered major losses on policies sold on the Affordable Care Act’s exchanges and will consider withdrawing from them, adding to worries about the future of the marketplaces at the heart of the Obama administration’s signature health law.

The disclosure by UnitedHealth Group Inc., which had just last month sounded optimistic notes about the segment’s prospects, is the latest sign that many insurers are finding the new business unprofitable, despite an influx of customers that has helped swell revenues.

The industry’s woes, and broad rate increases aimed at stanching the red ink, are putting pressure on the Obama administration to tweak aspects of the law; the issues also risk pulling the ACA back into the political spotlight...

UnitedHealth Group Chief Executive Stephen J. Hemsley said the company isn’t willing to continue its losses into 2017. UnitedHealth has already locked in its exchange offerings for 2016, but it is pulling back on marketing them during the current open-enrollment period to limit membership, which it said last month totaled around 550,000.

The company will make market-by-market determinations in the first half of next year about whether it will continue selling products on the exchanges.

“We can’t sustain these losses,” he said. “We can’t subsidize a market that doesn’t appear at this point to be sustaining itself.”

UnitedHealth made the move amid reduced expectations for growth on the exchanges, the anticipated shutdowns of the majority of the health law’s nonprofit cooperative insurers, and rising costs as its own enrollees continue to increase their rate of health-care use. Mr. Hemsley emphasized problems with consumers “coming in and out of the exchange system to use medical services,” or essentially signing up for health plans when they need to cover health expenses—an issue also highlighted by other insurers.

Exchanges represent a small share of UnitedHealth’s overall membership and revenue. But the company said its operating loss for the exchange business this year will amount to about $700 million, or 45 cents a share, including $275 million that will represent “advance recognition of losses” for 2016. The company said it was projecting an additional $200 million to $225 million in losses for next year that it wouldn’t include in its 2015 results. UnitedHealth said it was revising its 2015 earnings projection to $6 a share, from a previous range of $6.25 to $6.35.

UnitedHealth’s shares fell 5.7% Thursday to $110.63.

UnitedHealth’s announcement comes as other insurers have been sounding alarms about their exchange business, though the big insurer went considerably further than its peers in raising concerns about future viability. Aetna Inc. recently said it expects to lose money on its exchange business this year, but it hopes to improve the result in 2016. Humana Inc. and Cigna Corp. also flagged challenges. Even Anthem Inc., which said its exchange business is profitable, was downbeat in its third-quarter earnings call, warning that enrollment is less than expected.

“All the other big insurers are signaling the same problems,” said Ana Gupte, an analyst with Leerink Partners LLC. The major exception is companies that focus closely on the Medicaid population, such as Molina Healthcare Inc., she said. These companies have lower-cost networks of health-care providers and also draw many low-income consumers whose coverage is largely subsidized.

A Goldman Sachs Group Inc. analysis of state filings for 30 not-for-profit Blue Cross and Blue Shield insurers found that their overall companywide results were “barely break-even” for the first half of 2015. Goldman analysts projected the group would post an aggregate loss for the full year—the first since the late 1980s. The analysis said the health-law exchanges appeared to be a “key driver” for the faltering corporate results.

The impact of the insurance industry’s struggles is already clear in the products offered in the exchange’s current open-enrollment period. For these plans, which will take effect in 2016, many insurers have raised premiums to cover the medical costs of enrollees, which have run higher than many companies originally projected, fueling this year’s losses. Many insurers have also shifted to offering more limited choices of health-care providers.

During the current open enrollment period, premiums for a type of plan that is closely watched as a signal of consumer costs—the second-lowest-priced plans in the law’s “silver” tier—are increasing 7.5% on average across the roughly three dozen states that rely on the federal HealthCare.gov marketplace, according to the Obama administration. Some individual increases are far sharper.

Analysts say the danger is that higher rates might discourage enrollment, particularly by the younger, healthier consumers that the marketplaces need to draw in. That is because they are the ones most likely to feel they can go without insurance. Their absence would have the effect of driving premiums even higher in the future, because insurers would need more rate increases to cover the costs of a smaller, sicker pool of enrollees. At its worst, this cycle can feed on itself, creating what the industry calls a “death spiral.”

Already, "the risk pool is clearly skewed toward sick people,” said Chris Rigg, an analyst with Susquehanna Financial Group. He and other analysts said that a fundamental problem was a shortfall in enrollment, and to make the marketplaces work better, policy makers would need to take steps such as making it harder for consumers to sign up for coverage outside the annual open-enrollment window.

The Obama administration has said it aims to have about 10 million people with paid-up coverage on the state and federal health-law exchanges by the end of 2016. But that falls well short of some earlier projections: The nonpartisan Congressional Budget Office earlier this year estimated that at least 20 million people would buy policies under the law for 2016 coverage. Rest of article.

10 comments:

Anonymous said...

Single payer coming to a neighborhood near you.

Anonymous said...

I think single payer would/will be a terrible "solution" but then I have to wonder - could it be that much worse than the direction this is currently trending?

Anonymous said...

Comrade 9:59: Quit yoru whining. The state will take care of you. Our Dear Leader has promised free healthcare for everyone. Free Education, free food, free housing, free condoms, free transportation, free everything. Collectively we will live our lives free of worry. So, join the revolution and embrace change, for it is good.

Anonymous said...

What no one wants to discuss is the way the Obama administration has taken intractable positions on the law and its administration. It is SOP for Obama, who sees himself as part dictator, part rock star, and wholly uncriticizable minority. He says it and, damn the torpedoes, it will be done. When parties come with reasonable objections to parts of his health law (that by all accounts was pulled out of an old Democrat drawer and foisted upon the public through Congressional chicanery), he will hear none of it. He is in charge and you will abide by his decision.

If he had a scintilla of humility and a modicum of a desire to work together, these issues would certainly be mitigated, but this scorched earth attitude is manifesting itself in situations like these.

And here's the dirty little secret: Those evil corporations that are the enemy of every leftist and college student who considers The Daily Show to be an august news source? They're using the guidelines set forth in the ACA to reduce their care to the absolute minimum required, so employees are feeling the sting of no copay, $1000 deductible, no drug plan, etc. for the same cost as before. So all the Dems have managed to do is give corporations an excuse to cut benefits and save money.

Anonymous said...

The insurance cabal wrote the dang law-you'd have to a fool not to see it. So, fu*k em. Let them go broke in their quest for extortion.

Translation : we're not buying what you're selling. I'd rather pay the fine.

Kingfish said...

Don't feel sorry for the insurance companies one damn bit. They were warned and I"m sure their private economists and actuaries warned them as well. Screw 'em. No bailouts for them.

Anonymous said...

Aetna said they were doing fine. This is just posturing by Unitedhealth.

Anonymous said...

While it sounds good to the masses to say 'Even if you get sick, they have to insure you', that is not how insurance works. In Mississippi we used to have an assigned risk pool for companies who were poor risks for workman's comp. insurance (perhaps they still have it). We need something like that. In other words, if you are sick you pay more for insurance. They cannot turn you down, but can charge more. There would be a limit on how much they could charge. Take a small % of premiums from healthy people and add it to the extra amount that sick people would pay so they don't have to pay all of the extra costs. This keeps the costs in line for the health people so they will sign up. The idea that the government can force you to purchase insurance is unconstitutional and John Roberts knows it. I have no idea why he voted for this.

This entire thing was completely backwards. What we need is more completion, more companies selling health insurance, not less. People should buy health insurance like car insurance and not get it at work. We must throw this mess out and start over. The very thing that the liar-in-chief said we must do - lower medical costs, is what Obomacare will never do.

Anonymous said...

I'm waiting for the Kenyan to mandate term life insurance that your loved ones can purchase after you've passed away.

Col. Reb Sez said...

If Obamacare had mandated very basic, limited insurance it might have worked. But like most Democratic programs, they believed a magic wand would make it possible to provide in vitro fertilizations, sex change operations, free-free-free, etc., all on the public dime. All of this is done by charging people who just want basic insurance an arm and a leg. Essentially a young, healthy male who buys insurance is paying five or six times more into the system than he can expect to get out of it, even with the penalty. So of course people aren't signing up. It's a fool's game.

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Trollfest '07 was such a success that Jackson Jambalaya will once again host Trollfest '09. Catch this great event which will leave NE Jackson & Fondren in flames. Othor Cain and his band, The Black Power Structure headline the night while Sonjay Poontang returns for an encore performance. Former Frank Melton bodyguard Marcus Wright makes his premier appearance at Trollfest singing "I'm a Sweet Transvestite" from "The Rocky Horror Picture Show." Kamikaze will sing his new hit, “How I sold out to da Man.” Robbie Bell again performs: “Mamas, don't let your babies grow up to be Bells” and “Any friend of Ed Peters is a friend of mine”. After the show, Ms. Bell will autograph copies of her mug shot photos. In a salute to “Dancing with the Stars”, Ms. Bell and Hinds County District Attorney Robert Smith will dance the Wango Tango.

Wrestling returns, except this time it will be a Battle Royal with Othor Cain, Ben Allen, Kim Wade, Haley Fisackerly, Alan Lange, and “Big Cat” Donna Ladd all in the ring at the same time. The Battle Royal will be in a steel cage, no time limit, no referee, and the losers must leave town. Marshand Crisler will be the honorary referee (as it gives him a title without actually having to do anything).


Meet KIM Waaaaaade at the Entergy Tent. For five pesos, Kim will sell you a chance to win a deed to a crack house on Ridgeway Street stuffed in the Howard Industries pinata. Don't worry if the pinata is beaten to shreds, as Mr. Wade has Jose, Emmanuel, and Carlos, all illegal immigrants, available as replacements for the it. Upon leaving the Entergy tent, fig leaves will be available in case Entergy literally takes everything you have as part of its Trollfest ticket price adjustment charge.

Donna Ladd of The Jackson Free Press will give several classes on learning how to write. Smearing, writing without factchecking, and reporting only one side of a story will be covered. A donation to pay their taxes will be accepted and she will be signing copies of their former federal tax liens. Ms. Ladd will give a dramatic reading of her two award-winning essays (They received The Jackson Free Press "Best Of" awards.) "Why everything is always about me" and "Why I cover murders better than anyone else in Jackson".

In the spirit of helping those who are less fortunate, Trollfest '09 adopts a cause for which a portion of the proceeds and donations will be donated: Keeping Frank Melton in his home. The “Keep Frank Melton From Being Homeless” booth will sell chances for five dollars to pin the tail on the jackass. John Reeves has graciously volunteered to be the jackass for this honorable excursion into saving Frank's ass. What's an ass between two friends after all? If Mr. Reeves is unable to um, perform, Speaker Billy McCoy has also volunteered as when the word “jackass” was mentioned he immediately ran as fast as he could to sign up.


In order to help clean up the legal profession, Adam Kilgore of the Mississippi Bar will be giving away free, round-trip plane tickets to the North Pole where they keep their bar complaint forms (which are NOT available online). If you don't want to go to the North Pole, you can enjoy Brant Brantley's (of the Mississippi Commission on Judicial Performance) free guided tours of the quicksand field over by High Street where all complaints against judges disappear. If for some reason you are unable to control yourself, never fear; Judge Houston Patton will operate his jail where no lawyers are needed or allowed as you just sit there for minutes... hours.... months...years until he decides he is tired of you sitting in his jail. Do not think Judge Patton is a bad judge however as he plans to serve free Mad Dog 20/20 to all inmates.

Trollfest '09 is a pet-friendly event as well. Feel free to bring your dog with you and do not worry if your pet gets hungry, as employees of the Jackson Zoo will be on hand to provide some of their animals as food when it gets to be feeding time for your little loved one.

Relax at the Fox News Tent. Since there are only three blonde reporters in Jackson (being blonde is a requirement for working at Fox News), Megan and Kathryn from WAPT and Wendy from WLBT will be on loan to Fox. To gain admittance to the VIP section, bring either your Republican Party ID card or a Rebel Flag. Bringing both and a torn-up Obama yard sign will entitle you to free drinks served by Megan, Wendy, and Kathryn. Get your tickets now. Since this is an event for trolls, no ID is required. Just bring the hate. Bring the family, Trollfest '09 is for EVERYONE!!!

This is definitely a Beaver production.


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Jackson Jambalaya is the home of Trollfest '07. Catch this great event which promises to leave NE Jackson & Fondren in flames. Sonjay Poontang and his band headline the night with a special steel cage, no time limit "loser must leave town" bout between Alan Lange and "Big Cat"Donna Ladd following afterwards. Kamikaze will perform his new song F*** Bush, he's still a _____. Did I mention there was no referee? Dr. Heddy Matthias and Lori Gregory will face off in the undercard dueling with dangling participles and other um, devices. Robbie Bell will perform Her two latest songs: My Best Friends are in the Media and Mama's, Don't Let Your Babies Grow up to be George Bell. Sid Salter of The Clarion-Ledger will host "Pin the Tail on the Trial Lawyer", sponsored by State Farm.

There will be a hugging booth where in exchange for your young son, Frank Melton will give you a loooong hug. Trollfest will have a dunking booth where Muhammed the terrorist will curse you to Allah as you try to hit a target that will drop him into a vat of pig grease. However, in the true spirit of Separate But Equal, Don Imus and someone from NE Jackson will also sit in the dunking booth for an equal amount of time. Tom Head will give a reading for two hours on why he can't figure out who the hell he is. Cliff Cargill will give lessons with his .80 caliber desert eagle, using Frank Melton photos as targets. Tackleberry will be on hand for an autograph session. KIM Waaaaaade will be passing out free titles and deeds to crackhouses formerly owned by The Wood Street Players.

If you get tired come relax at the Fox News Tent. To gain admittance to the VIP section, bring either your Republican Party ID card or a Rebel Flag. Bringing both will entitle you to free drinks.Get your tickets now. Since this is an event for trolls, no ID is required, just bring the hate. Bring the family, Trollfest '07 is for EVERYONE!!!

This is definitely a Beaver production.

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