Aetna reaffirms 2015 outlook after UnitedHealth guidance cut

UnitedHealth’s announcement about the ACA exchanges was surprising because, as recently as a month ago, the company was touting future growth prospects for that business. “We can’t subsidize a market that doesn’t at this point appear to be sustaining itself”.

Yes, it’s a trick question.

“The company is evaluating the viability of the insurance exchange product segment and will determine during the first half of 2016 to what extent it can continue to serve the public exchange markets in 2017”, UnitedHealth Group said in a press release Thursday.

“We know a lot more today about this business”, he said, “pushing rate increases in the low teens” for exchange policies.

High-deductible plans are part of the problem, Dr. Ezekiel Emanuel added.

Insurers in many markets have struggled to find the right mix of healthy customers to balance the sicker ones since the exchanges opened for business in the fall of 2013. You might have heard that insurance premiums on the exchanges are rising substantially, which isn’t exactly welcome news. After all, people are required to buy the stuff, on pain of a hefty penalty. A few commentators, also including me, have eased off on those fears in recent years. The most telling metric in Gallup’s poll comes when approval gets broken out by insurance type, when aggregated between its 2014 and 2015 surveys. The company had just started offering plans to Tennesseans through the insurance exchange as of November 1.

“This year, people looking for coverage in the marketplace continue to have a robust number of plan choices and as the data shows the marketplace is stable, vibrant and a growing source of coverage for new consumers”.

Other insurers selling plans on the exchanges have posted losses too.

UnitedHealth expects to book an operating loss of slightly more than $700 million this year, largely from its exchange business. It’s unlikely that we’ll hit the trigger until 2019 or later, if indeed we ever do.

UnitedHealth operated on individual exchanges in 23 states this year. “They came in the second year, and they might have gotten an adverse pool”.

The individual insurance exchanges created by Obamacare may be in long-term peril after the country’s largest health insurer said Thursday that it may pull out of the program in 2017.

This is potentially extremely bad news for Obamacare. ObamaCare doesn’t just kill coverage options people liked.

Rubio: “For over a year, I’ve fought to protect Americans from having to fund massive bailouts to protect the profits of the insurance companies that helped write Obamacare”. That’s not the only possible explanation.

“Anthem remains committed to enhancing access to high quality, affordable health care for all of our members inside and outside of the insurance exchanges”, Joseph Swedish, Anthem’s chief executive officer, said in a statement Friday.

Does that mean that we’re definitely in for a death spiral?

UnitedHealth said Thursday it has been hurt in particular by customers who signed up for coverage outside the annual open enrollment window and use more health care in general than those who bought coverage during open enrollment. It seems likely, from listening to the call, that UnitedHealth chose to do a certain amount of “big bath accounting”. Obama’s Department of Health and Human Services vowed to go to Congress for full funding to reimburse insurers for their losses.

Insurers are also losing more money than anticipated. It really is seeing something that looks dangerously like adverse selection.

Obamacare has been surprisingly resilient in Washington despite efforts from several lawmakers to repeal the law.