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Why the Country’s Largest Health Insurer is Calling it Quits in Some Obamacare Marketplaces

Why the Country’s Largest Health Insurer is Calling it Quits in Some Obamacare Marketplaces

The health insurance pickins just got slimmer

The country’s largest health insurer, UnitedHealth announced earlier this week it would cease participating in some Obamacare markets.

In a post-ACA world, insurers like UnitedHealth are losing money and claim they’re no longer able to offer affordable premiums in certain areas.

UnitedHealth’s Obamacare exit isn’t unexpected. Last year, we found that zero PPO plans were offered for the independently employed in one of the nation’s largest cities — Houston. Blue Cross Blue Shield and Humana cited similar reasons for paring down their offerings:

In July, Blue Cross Blue Shield of Texas, the state’s largest insurer, sent a letter to its PPO customers noting, in part, that “the market has changed” since the Affordable Care Act was implemented.

“We found that the individual PPO plan was no longer sustainable at the cost it was being offered,” the company said. “Because we want to make sure that our plans are affordable, we decided to not offer individual PPO plans in 2016.”

Humana issued a similar explanation on Tuesday in an emailed statement to the Chronicle: “Humana chose to no longer offer preferred provider (PPO) plan options on the Marketplace in Texas for the 2016 plan year in order to retain the overall affordability and access of the individual health plans offered by Humana.”

But Back to UnitedHealth’s latest announcement. Noam Levey of the LA Times reports:

The move, widely expected for months, will likely have relatively little effect on what most consumers pay for health coverage, as other insurers have out-competed UnitedHealth in the marketplaces created by the 2010 health law.

Nor will the decision seriously threaten UnitedHealth, as the marketplaces are a small fraction of the insurance giant’s overall business, which includes providing coverage to millions of people who get health benefits through an employer.

But UnitedHealth’s exit may leave some of the roughly 12 million Americans who rely on the marketplaces with fewer insurance choices next year. The announcement also underscores how challenging implementation of the complex health law remains, even three years after the marketplaces debuted.

UnitedHealth warned in November that it was having trouble with its marketplace business, noting that its customers were sicker than expected, leading to higher medical claims.

The company already announced it was pulling out of several states, including Arkansas and Michigan.

Speaking on an otherwise upbeat call with investors Tuesday, CEO Stephen Hemsley said UnitedHealth would remain in “only a handful of states” in 2017, though he did not specify which.

“Our own experience and performance have been unfavorable in these markets. 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,” he explained.

Several other insurers, including state Blue Cross Blue Shield plans, have reported similar challenges in recent months.

The exchanges themselves are in decay. 12 of 23 have shuttered, New York’s exchange is under investigation, and 8 more are expected to close shop this year.

For fun, here’s’s CEO pretending like this isn’t bad news.

Of course none of this is a glitch of the Obamacare system, it’s all by design. How else would they shove us into single payer?

Follow Kemberlee on Twitter @kemberleekaye


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VetHusbandFather | April 21, 2016 at 4:23 pm

This is all proceeding to plan. When insurers cannot provide the ACA mandated care in a way that is financially tenable, the liberals will be “forced” to step in with a single payer option that is “more efficient” and thus can provide that level of care at a “lower cost” than the insurance companies would have.

Kevin Counihan is certainly a smug bastard. Of course, he can afford to be smug since millions of self employed Americans who are seeing their choices decrease and their prices increase are paying for his FEHB plan that isn’t limited to only HMOs.

If only someone had foreseen that mandating benefits would increase costs, or that guaranteeing coverage would degrade the risk pool and increase experience costs!

Oh, that’s right – virtually every single Republican and conservative analyst, pundit, and elected official said exactly that, and the final version was passed without a single Republican vote.

    The Livewire in reply to Estragon. | April 21, 2016 at 5:56 pm

    I often say “Who could have seen this coming? Oh yeah, people who can do math.”

    VetHusbandFather in reply to Estragon. | April 21, 2016 at 10:12 pm

    Liberals are only acting like they didn’t see this coming. It’s all part of the plan. How better to bring about single payer than to rig the private healthcare system to fail?

Boy! If only we could have seen this coming… Oh, wait…

I think we should bring back tar and feathers. It’s protected under the First Amendment, right?

Jonathan Gruber: “Lack of transparency is a huge political advantage.”

What can’t go on…won’t.

It’s one of those economics laws that the Collective keeps trying to break.

And only one candidate for President has actually consistently tried to do something about it in spite of the cowardly opposition of the Republican establishment.

His opponent? Not so much

“”But I’m quite liberal and getting much more liberal on healthcare and other things. I really say: What’s the purpose of a country if you’re not going to have defensive and healthcare?” he told King. “If you can’t take care of your sick in the country, forget it, it’s all over. I mean, it’s no good.

“So I’m very liberal when it comes to healthcare. I believe in universal healthcare. I believe in whatever it takes to make people well and better.”

And on Friday, 16 years after his interview with King, Trump reiterated that point. ”

In his own words.