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 Healthcare.gov’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?
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