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UnitedHealth pulling out of most ObamaCare markets


waving flagBy Peter Sullivan – 04/19/16

URL of the original posting site: http://thehill.com/policy/healthcare/276787-unitedhealth-pulling-out-of-most-obamacare-markets

The insurer UnitedHealth is pulling out of the ObamaCare marketplaces in all but a “handful” of states in 2017, the company announced Tuesday.

The announcement, made by CEO Stephen Hemsley on an earnings call, follows up on the company’s statement in November that it was considering dropping out of ObamaCare due to financial losses

The moves by UnitedHealth, the nation’s largest health insurer, have drawn attention for what they could indicate about the sustainability of ObamaCare as a whole. The Obama administration has downplayed the importance of UnitedHealth, saying the insurer is a fairly small player in the marketplaces, with about 6 percent of all enrollees. The insurer’s coverage was often not priced competitively, officials have said.

But UnitedHealth is not alone in warning that the financial losses in the ObamaCare marketplaces are reaching dangerous levels. Other insurers that play a bigger role in the marketplaces, including some Blue Cross Blue Shield plans, have also raised the prospect of pulling back some of their ObamaCare plans.

Insurance companies are expected to seek significant premium increases next year to stem their losses. In the past, the impact on consumers has been blunted by ObamaCare’s tax credits. States will have the power to accept or reject the premium increases.

Complete Message

Republicans have long warned that ObamaCare would “collapse under its own weight,” and they seized on the UnitedHealth news to press their case.

“This isn’t about spreadsheets and quarterly reports — it’s about the President’s broken promise that families would have more choices under ObamaCare,” Sen. Ben Sasse (R-Neb.) said in a statement Tuesday.

“This year, in 36 percent of the nation’s counties, families could pick between only one or two insurers on the exchange and, given today’s news, next year looks like it could be even worse.”

The administration, meanwhile, said it expects that insurers will both come and go as the new insurance markets set up by the Affordable Care Act develop. But overall, they say the law is working as planned.

“The Marketplace is a reliable source of coverage for millions of Americans with a robust number of plan choices,” Department of Health and Human Services spokesman Ben Wakana said in a statement. “We have full confidence, based on data, that the Marketplaces will continue to thrive for years ahead.”Leftist Propagandist

A Kaiser Family Foundation study on Monday found that if UnitedHealth pulled out of all 34 states in which it participated in 2016, the number of choices for consumers would decline. The percentage of U.S. counties with only one or two insurers to choose from would grow from 36 percent to 53 percent, the study found. But premiums would not be affected greatly because UnitedHealth often does not offer one of the cheapest plans, according to the study.

It remains unclear in what states UnitedHealth will continue to offer ObamaCare coverage, though it appears that the company will be leaving most of the 34 states where it now participates.

Caroline Pearson, senior vice president at Avalere Health, a consulting firm, said that premium increases for insurers to halt their losses next year are likely but that it would be a healthy move that would allow insurers to stop losing money.

“I don’t think it should be especially worrying,” she said of UnitedHealth’s decision. “But I do think it speaks to some of the very real challenges that plans are experiencing.”

“I’m certainly not expecting a lot of other plans to drop out,” she said, noting that UnitedHealth is different than other insurers because it entered the ObamaCare market late looking for a “growth opportunity.”Picture4

The ObamaCare market has been smaller and costlier than expected, partly due to the number of sicker enrollees.

“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,” Hemsley, the UnitedHealth CEO, said on the earnings call in explaining the company’s move.

— This story was updated at 2:02 p.m.

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Political

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I’ve Had it With the Health Insurance Diatribe


Once again the subject of health insurance has hit the topics of discussion with the anniversary of President Obama’s Socialist Medical Program. During the original arguments, I got real tired of hearing the pundits on all sides make statements that were not true, misleading, and down-right ignorant of the Health Insurance Industry. Today, I heard more conversation and the same misinformation.Let’s discuss some facts you have NOT heard on television, radio are any news outlet;

  1. First fact: Insurance, of any kind, is purchased to give you coverage against a loss. NO INSURANCE COMPANY WILL INSURE A BUILDING WHILE IT IS BURNING. You might say, “Well of course”. Remember that when you hear any discussion of preexisting conditions. Some of those preexisting conditions are the equivalent of a BURNING BUILDING. You’re asking the Insurance Company to BUY CLAIMS IN ADVANCE OF COVERAGE. You wouldn’t so that, and neither do smart insurance companies.
  2. The first question all these pundits need to be asked is, “Do you know how a health insurance premium is determined? What is the formula”? No, they don’t know and that is why they are talking out of their hat.
    1. The formula is M – I + L = Gross Premium. Mortality minus Interest made from investing a determined amount of the premium (it’s the interest off the investments that pay the medical bills. You can’t collect a dollar of premium and pay a dollar of medical bills. That’s bankruptcy) plus the Loading which is the cost of doing business.
    2. Actuaries establishes the statistical probability of medical claims based on age, sex (proven statistic that women use medical practices more than men and THAT is the reason they cost more to insure), ZIP CODE and other factors. that gives the insurance company the Mortality number they need to start the formula.
        1. Before you say anything about the ZIP CODE. It is a fact that some Zip Codes use more of the Medical Community than other Zip Codes. For example, the 900 set of Zip Codes (Los Angeles) are some the most expensive Zip Codes in America. They have one of the largest population of illegal immigrants, legal immigrants from countries that offer social medicine and people in general who cannot afford medical care. All of them use the Emergency Departments of Hospitals for their primary care. That drives up cost, because someone has to cover that cost. It is added to all of us through the Actuaries who use that as one of their statistics.
        2. That is why Health Premiums to cover the same person or family in one Zip Code will be less than another. For example, I had some clients leave Southern California and move to Arizona. Their premiums went down almost half. That’s why you hear these ignorant pundits cry about not crossing State lines to buy insurance. You can do that now, however, you’ll have to drive to Arizona to get your care.
    3. Every State has its own Department of Insurance to regulate who sells what in their State. This is supposed to protect the citizens from false companies selling a product that is no good. However, some of these DOI’s are themselves corrupt seeing to it that only the companies they like can sell in their State.
      1. Each DOI also determines what has to be covered. That varies from State to State, which also determines the prices Health Insurance Premiums. Most pundits don’t want that, and think it corrupt of the insurance industry to charge more to cover more. REMEMBER THE BURNING BUILDING?
      2. That is also why your health insurance coverage might not cover you while you’re traveling. Check the fine print.
    4. The only time health insurance covers you Nationwide is GROUP Coverage. Here the DOI’s have cooperated in the coverage. A Company want to provide health coverage for their people, and they have offices within the State (Zip Code issues), and in other States (Coverage issues). In the company are people with preexisting conditions. So the negotiation begins. The Insurance Company agrees to take a certain amount of risk on those preexisting people in exchange that the company provide coverage for everyone. The Insurance company knows that 20 somethings rarely use their coverage and know they will have less LOSS with them.
      1. Organizations like the NASE have Lobbied Congress aggressively to allow business associations across America to be able to buy Group Insurance. That would allow self-employed people to organize a common association to buy Group Health Insurance Coverage. The larger the group, the better the price they could negotiate better premium rates, and cover their uninsurable employees. This is a GREAT idea, and a major solution to our National Health Coverage Crisis. It is also one of the simplest solution that would cost our government NOTHING. Congress has not budged yet. If they (the Socialist) did, they would lose one more control over American business. By the way. The Self Employed (1 to 8 employees) are the number one employer in America. What a group if anyone got them organized.

Any Insurance Company, insuring anything, has to accept a certain amount of risk in underwriting coverage. Remember, the claims you file are paid with the ROI (Return on Investment) of the part of the premium you gave them to cover your possible loss. I’ve always maintained that the Insurance Companies with the highest cash reserves (ROI) is the company best able to pay a claim in any emergency. I can’t trust a company that is constantly reorganizing because of internal financial problems. They can’t pay their bills, how are they going to pay my claims?

Yes, Health Insurance Companies are in business to make money, and yes some have gone from profitable to greed. The market usually takes care of them because of competition. However, when any State DOI manipulates competition by corrupt practices by allowing only certain companies to sell in their State, that means those citizens are usually not getting the best return on their health care coverage choices.

The solution is simple. Get the Federal Government OUT of the Health Insurance Business. Pass the law allowing self-employed people to form national organizations for the purpose of negotiating for Group Coverage. Elect State Department of Insurance Heads that will drop the unfair competition restrictions, elect State Representatives that will get OUT of the Health Insurance Mandates.

I do not represent that I’ve covered everything about this subject. I have tried to cover the relevant. I welcome your reaction.

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