Friday, April 22, 2016

UHC leaving Obamacare

The Wall Street Journal reported this week that UnitedHealth will withdraw from most Obamacare exchanges:

The nation’s largest health insurer said it would pull out of nearly all of the Affordable Care Act’s exchanges, signaling continued instability in the law’s signature marketplaces as they head toward their fourth year.

After losses on the exchanges, UnitedHealth Group Inc. will pare its presence from 34 states this year to “only a handful” in 2017, said Chief Executive Stephen J. Hemsley during the company’s first-quarter earnings conference call Tuesday. Mr. Hemsley said that the “smaller overall market size and shorter-term, higher-risk profile within this market segment continue to suggest we cannot broadly serve it on an effective and sustained basis.”

UnitedHealth also steepened its projected loss on the 2016 exchange business to $650 million from around $525 million, amid signs that new enrollees’ health status appeared worse. The company booked a large chunk of that loss last year. UnitedHealth said it had approximately 795,000 exchange enrollees at the end of the first quarter.

The announcement follows on UnitedHealth’s earlier comments that it was reconsidering its presence in the ACA exchanges. So far, regulators in more than a dozen states have disclosed that UnitedHealth will withdraw from their health-law marketplaces. The departure of UnitedHealth would reduce the number of options for some consumers, particularly in certain rural and southern regions of the U.S. In some cases, according to a new analysis by the Kaiser Family Foundation, marketplace consumers might have only one insurer option, unless a new entrant emerges.

Overall, UnitedHealth reported a profit of $1.61 billion, or $1.67 a share, up from $1.41 billion, or $1.46, a year earlier. Excluding certain items, adjusted earnings rose to $1.81 a share from $1.55. Revenue climbed 25% to $44.53 billion.

Like UnitedHealth, a number of insurers saw significant losses in 2015 on the exchanges, and many sought rate increases and tweaked their offerings for 2016 in hopes of improving results. Still some, like UnitedHealth are already projecting losses for this year—including Humana Inc., which has said it was evaluating its continued participation in the exchanges.

Many of the nonprofit cooperative insurers created by the law have already folded, but several of the remaining ones are in challenging financial positions, making their role in 2017 uncertain, said Deep Banerjee, an analyst with Standard & Poor’s Ratings Services.

Insurers also face a new challenge in 2017 because a reinsurance program created by the law, which helped reduce risk for the companies, is set to sunset, though the effect may be blunted next year by a one-year moratorium on a health-insurance tax. “The reinsurance money was a big supporting factor, and that is going away,” Mr. Banerjee said.

Analysts expect Blue Cross and Blue Shield insurers, the backbone of the exchanges in many states, to generally remain in the ACA marketplaces in 2017. The four other big national insurers are currently seeking federal approval for major mergers— Aetna Inc. to take over Humana, and Anthem Inc. to acquire Cigna Corp. —creating pressure to avoid torpedoing the Obama administration’s signature health marketplaces, analysts said, though some companies might tweak their offerings state-by-state. Rest of article.

Kingfish note:  The list of states that will see UHC's exit includes Mississippi.  UHC will withdraw from Mississippi's ACA next year.   Humana and Ambetter will continue to participate in the exchange.  UHC was the only company that served all 82 counties.  Many counties will now have only one heath insurance company available through the exchange.


Anonymous said...

A stellar failure than only a narcissist like the Kenyan would consider a towering accomplishment.

Anonymous said...

And yet people keep beating the expanded Medicaid drum.

Anonymous said...

With all of the carrier consolidations, we're headed to single payer in way or the other. Which was the socialist bastard's goal all along.

Use To Be H.R. said...

My experience has been that usually it's everybody else pulling away from United. Never heard so much bitching about one empire from so many medical providers.

Anonymous said...

Obama has done more to delay single payer than to hasten it. The skullduggery employed to pass the legislation will not be easily overcome politically.

Anonymous said...

UHC probably didn't like actually having to pay any claims.

Spread 'Em, Please said...

Obama is history. Just wait until Hillary gets to implement her Healthcare System Plans. She's been steamed about this for twenty years.

Anonymous said...

No surprise here - UNH will be the first of many to leave Obamacare. There is no way for any insurance company to be profitable long term if you have guaranteed issue & community rating. People are not going to buy the policies if they think they won't pay when they are sick. And when the IRS comes in every year and recalculates your subsidy because the income you guessed when you signed up was too low (because you didn't include capital gains/dividends/IRA distributions/pensions/interest taxable& tax free/unemployment comp)and takes back a lot of all of your "advanced tax credits".

Health insurance is one product where you don't know if the policy you have is any good until you try to collect. With narrow networks and high deductibles, healthy people find that they pay thousands in premiums on a product that they are unlikely to collect on. If they are young and have no assets, they will forego the insurance and take the risk, knowing that if they have a really serious health issue, they can always sign up later because of the guaranteed issue.

Sick people will sign up if they think they payout from the insurance will exceed the premiums they have to pay. So the sick and costly sign up, because it is guaranteed issue.

Anonymous said...

What happens when people without insurance who are sick with a cold go to the ER? Who pays then? Why does a single Tylenol cost $10 in the hospital? Unpaid bills. As much as we want to deny it, many people just can't afford health care or health insurance.

either hospitals deny people care who don't have money or adequate insurance or we go to socialized medicine. there's no other options that will work.

I have a job and insurance and get mad as hell when I have to spend 1500 (in addition to my insurance paying 3k) for a child to get a few stitches at an emergency room.

WERE paying for those without health insurance through outrageous charges!

Anonymous said...

Insurance companies were not originally designed to be for-profit businesses. They were designed to share the burden/risk of unforseen expensive catastrophies. Remove the profit component and its still expensive but more managable. People need insurance but not that which is a forced purchase by the govt.

Anonymous said...


Anonymous said...

This has been the plan all along. Obama wants the gment to control everything. Never mind that it won't work. Democrats need to keep poor people poor so they can pretend to help them and get their votes. They set this up on purpose so that the insurance companies could not survive. What is happening to this nation is sad and completely unnecessary.

Anonymous said...

Does UHC have any of the Obamacare market in Mississippi. I know Blue Cross has about 80% of the non-Obamacare business.

Anonymous said...

United has so many rules and then changes them so often they are useless insurance for the uneducated. I have marketplace so I know the process. Could not afford health insurance without marketplace. Getting United was a mistake. Four months ago they did not use the automatic pay after having used it for months. they sent back claims with note that I had not paid the insurance bill. this was a lie and I actually had them to call doctors' office and report it was a lie. In February they pulled 4 payments out of my bank account. After spending untold hours I finally got my money back but did to threaten them with insurance commissioner getting involved. Comcast gives better customer service than United.

Not a fan of Obama or the healthcare program, but it has been a God send to me. Maybe some of you need to have some compassion and empathy.

Anonymous said...

The fact of the matter is that healthcare cost skyrocketed when Bush allowed the steep increases in drug prices charged to Medicare. This allowed private insurers and paying citizens to also get high jacked too everyone forgets that big goof up . So all of you Obama Bashers dig back a little further to note that the drug lobbyists controlled Bush I and Ii

Anonymous said...

So two Bush wrongs makes Obama all right. I get it.

Anonymous said...

Before Obama care the people with insurance paid for those without insurance. People went to the emergency room and did not pay. Now we have Obama care and the people are still paying. Now there is an added cost because the govt. is involved. Nothing has changed except the price of healthcare and the amount of bogus claims.

Anonymous said...

6:15 receives monthly internet prize for pointing out that this, too, is the fault of Bush.

Anonymous said...

Isn't it a little late to be blaming everything on Bush? It won't be long until the next president can blame everything on Obama.

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