Obamacare dodged a huge bullet last summer.
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The health insurance indicated that it was intending to sell the plans in eleven more States commencing from next year through the Affordable Care Act.
The announcement came amid a spate of tough news for Obamacare.
Jefferies analyst Brian Tanquilut said “the potential impact from the exchange risk seems to be more than priced in to the (hospital) stocks at current levels especially since they’re doing big buybacks near term”.
When the Patient Protection and Affordable Care Act was signed into law in 2010, its sponsors said it would “bend the cost curve” of health care.
This announcement from UnitedHealth is unexpected. About 90 percent of returning consumers will have three or more insurers to choose from for 2016 coverage.
“As we’ve seen during the first two weeks of open enrollment, 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”, said Aaron Albright, spokesman for the Centers for Medicare and Medicaid Services, which oversees Obamacare. The company covers less than 6 percent of the exchange population; if it does pull out, those people will be able to get other coverage.
However, federal government spokesperson Jonathan Gold called the statement by one issuer “not indicative of the marketplace’s strength and viability”.
Aetna told investors at a conference earlier this month that its exchange business was unprofitable this year, but it hoped to improve margins next year.
“With the help of our partners, we’re thrilled to announce these new opportunities for Ohioans”, Kenisha L. Sanders, Ohio Communications Director for Enroll America said.
The electronics retailer said it expects “near flat” revenue in the fourth quarter – which includes holiday shopping. None of this is to suggest Obamacare is about to get repealed.
The company said it expects significant losses on its individual health plans related to the 2015 and 2016 policy years.
Today’s results show that an increasing number of consumers are in plans where they are receiving more value for their premium dollars up front because their premium rates were set to reasonably reflect insurers’ spending on medical care and quality improvement activities. “Deductibles are up the roof, networks [of health providers in plans] are narrowing”.
In addition, according to a similar report by the Milwaukee Journal Sentinel, Helmsley said that UnitedHealth is revising its 2015 earnings outlook due to the exchange-compliant policies it provides.
“It’s very hard to create stability in a world where half of the Congress is gunning to kill the program”, says Mendelson.
UnitedHealth’s shares slumped 5.7 percent to $110.63 on Thursday. UnitedHealth said it saw growth in all other benefit market segments. UnitedHealth boosted its Obamacare presence for 2016, expanding to 11 new markets.
Still, he added, “there’s no question this is a much harder year for the exchange plans”.
UnitedHealth’s move also comes a month after it gave a relatively upbeat view of its Obamacare participation. This is the largest insurer in the nation saying it will lose more and more money selling the kinds of plans Obamacare requires to be sold on the exchange. The percentage of consumers in the individual market who are now covered by insurers that are meeting the medical loss ratio target is 85.9 percent, compared to 62.3 percent in 2011.
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While seen as a serious challenge to the health care law, United’s decision alone doesn’t mark the death knell for the exchanges.
