“With Congress limiting the bailouts of insurance companies for two years in a row, business is not looking good for the industry that lobbied for Obamacare. The latest casualty is United Healthcare, which announced that it is withdrawing from most of its 34 Obamacare exchanges next year.
Announcing the decision during a first quarter earnings conference call, UnitedHealthcare CEO Stephen Hemsley said, “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."
Due to congressional limits on insurance company bailouts, in October the Department of Health and Human Services transferred $362 million to loss-making insurance companies, rather than the $2.9 billion that they requested.
The Health Insurance Association of America, under the leadership of Karen Ignagni, lobbied heavily in favor of the Affordable Care Act. But now the pool of insured is smaller and sicker than they anticipated.”
“If Congress holds its ground during the appropriations process and refuses to bail out the insurance companies for fiscal 2017, it is likely that more of them will withdraw from the exchanges, raising prices for existing customers. Premiums rose in some markets by 20 percent in 2016, leading to more healthy young people dropping out of plans or not enrolling, accelerating the financial imbalance.
Look at UnitedHealthcare as the canary in the coal mine, and expect more withdrawal announcements in the future.” - UnitedHealthcare’s Exit Augurs Badly for Obamacare, economics21.org, 04/19/2016
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