UnitedHealth threatens to ditch Obamacare and other business news

UnitedHealth is the biggest USA health insurer and if it is going to face mounting losses due to Affordable Care Act’s exchange, the same thing might be happening with other health insurers across the US. The insurer said it was scaling back its marketing for coverage that starts in 2016, and it will decide next year whether to stay in the exchange business in 2017.

“The biggest US health insurer is considering pulling out of Obamacare as it loses hundreds of millions of dollars on the program, casting a pall over President Barack Obama’s signature domestic policy achievement”.

Earnings per share will probably be $6 this year, down from a range of $6.25 to $6.35, reflecting a “continuing deterioration in individual exchange-compliant product performance”, UnitedHealth said.

“Every day, tens of thousands more Americans turn to the Health Insurance Marketplace for health coverage and even more return to the Marketplace for another year”, U.S. Department of Health and Human Services spokesman Ben Wakana said in a statement. And don’t think for a minute that the other insurers find the ObamaCare economic model any more palatable.

“It’s way too early to call it quits on the ACA and on the exchanges”, Aetna CEO Mark Bertolini said on an October 29 conference call held to discuss third-quarter financial results.

This news would be mostly unremarkable except for the fact that those state exchanges are part of Obamacare, and it doesn’t take much to get people hyperventilating about the imminent death of Obamacare and speculating about its ramifications for the 2016 presidential campaign.

Since the warning emerged, much attention has focused upon the challenges posed by an ever fluctuating healthcare landscape and the flaws of the Affordable Care Act.

Remember when it became clear that people couldn’t keep their plans because they plans would disappear, and Obama claimed it wasn’t his fault if insurers stopped offering the plans?

Addressing one of the regulatory issues late Thursday, the Obama administration reiterated its reinsurance commitments that were supposed to help offset plan losses on high-cost patients for first three years of the Obamacare rollout. Like exactly the opposite of what UnitedHealth Group said only a month ago. In remarks to analysts and press reports on Thursday, Aetna and insurer Kaiser Permanente re-affirmed their commitment to selling through the marketplaces.

In 2014, the company said ACA “negatively impacted full year net earnings by $1 billion or approximately $1.00 per share”.

“Disproportionately, the sick are signing up and the healthy are dropping out”, said Laszewski, adding that alternative plans with fewer benefits but lower costs should be made available.

It’s no surprise. As we’ve reported, Americans are finding that ObamaCare plans are still too expensive – even with generous taxpayer subsidies.

Leaders of UnitedHealth had just said last month that they expected the exchanges to mature into a strong growth market.

The earnings affirmations echo that of Centene Corp and Molina Healthcare Inc.

The company increased its exchange participation from 4 to 24 and has plans to increase that number to around 34 in 2015 despite Thursday’s announcement.