Tuesday, April 19, 2016
Largest US health insurer exiting majority of ObamaCare exchanges
UnitedHealth, the nation's biggest health insurer, will cut its participation in public health insurance exchanges to only a handful of states next year after expanding to nearly three dozen for this year.
CEO Stephen Hemsley said Tuesday that the company expects losses from its exchange business to total more than $1 billion for this year and last. He added that the company cannot continue to broadly serve the market created by the Affordable Care Act's coverage expansion due partly to the higher risk that comes with its customers.
This was inevitable. The premise was that uninsurable people that had pre-existing conditions would be given insurance because the healthy and young would pay premiums to subsidize them. Oops didn't quite work out that way. The young and healthy made a rational and self interested economic decision to not participate because the odds are they would not need insurance. The only people entering these exchanges are the sick and poor. As less healthy people participate the premiums for the remaining people need to go up. It isn't working and it was never going to work.
The insurance companies made a Faustian bargain. They would go along with ObamaCare and basically become regulated utilities guaranteed millions of new customers and with the force of government making people buy a product they do not want or can afford.
It did not work out as human action came into play and people made a economic decision not to participate. The whole thing is coming down just as was predicted by many. After all the lies and screwed up lives (many people died because of this farce) all we have is a screwed up system that no one is happy with. But at least Obama and the other marxists got to virtue signal about how caring they are for a couple of years.
The real pain hits next year in 2017 conveniently after the next election.
2017 will be the real test. The law contains two programs that will expire at the beginning of that year: "Risk corridors" and "re-insurance." Both programs conceal health insurance's true costs – costs that truly have skyrocketed under the ACA – by subsidizing insurance companies with taxpayer money. Risk corridors give insurance companies money if their customers spend more on health care than the insurer estimated; reinsurance allows insurance companies to bill the federal government for particularly expensive patients.
The Affordable Care Act's authors created these two programs for a specific reason: They would ease the transition from the pre- to the post-ACA health care system. In the post-ACA world, health care is more expensive – a fact borne out by 2014's average 41 percent spike in base premiums. Reinsurance and risk corridors have largely hidden these price increases from consumers for the past year; they will continue to do so until Jan. 1, 2017.
Premiums will likely skyrocket come that date. Our study estimates that once the two subsidies expire, premiums for a cheap bronze plan in Ohio could increase by a staggering 275 percent for individuals and by 130 percent for families. In Kentucky, the increases could be 96 percent for individuals and 46 percent for families.
It appears that the law's authors didn't think this would be problematic; they assumed that the ACA would be so popular, or at least engrained in the national psyche, that such changes would be taken in stride. Instead, recent polls show that the Affordable Care Act is more unpopular than ever.
Yikes!! The unaffordable care act is one of the reasons the economy sucks. It is sucking so much money out of consumers wallets they have less to spend on consumption. Look for the whole mess to come crashing down and calls (Bernie is already screaming about it) for a single payer system (basically Medicad for all). How will government run single payer with the already $19 trillion dollar debt? These people are nuts.