On the other hand, he said, young healthy people, the so-called “invincibles” are not signing up for health care in the exchanges at the rates insurers had hoped.
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The announcements from all three insurers come as customers visit the online exchanges to compare plans and shop for coverage that starts next year. He adds that “the news about United does not presage a death spiral”, because there are too many factors-like the subsidies that keep insurance affordable for millions even as premiums rise-that will keep customers in the markets. Enrollment, while growing, has fallen short of capturing the share of the eligible uninsured that was anticipated.
What UnitedHealth’s action suggests is that the company is not sure it can make money in this market at any price.
Anthem said last month that 2016 would be a challenging year on the exchanges, where it has about 824,000 customers, and that the business would drag on profit.
Critics of the Affordable Care Act were quick to blame the law itself for the problems that UnitedHealth Group disclosed Thursday, including a projected $900 million in losses from the exchanges this year and next. Indeed, Aetna told analyst firm UBS that the phenomenon of more individuals coming in and out of exchanges during special enrollment periods “does not bode well for having a balanced long-term risk pool”.
At the moment, one of the biggest hurdles Obamacare is facing comes from insurance providers who say the exchange has eaten into their profit margins and is becoming detrimental to their success as a business. And even if they do leave, she said, there are plenty of other insurers to pick up their market share.
“We can not sustain these losses”, he said.
Tim McBride, a health care economist at Washington University, says the big insurer’s bombshell is just part of a natural sorting-out process. “[Thursday’s] statement by one issuer is not indicative of the Marketplace’s strength and viability”.
With less than a year before the USA presidential election, Goldman Sachs analyst Matthew Borsch wrote that the health of the exchanges “may ultimately have significant policy and political implications”. “But I would be very surprised if [the Department of Health and Human Services] doesn’t do something to accommodate their issues”.
If a GOP candidate wins the 2016 election and Republicans retain the majority in Congress, most investors expect to see Obamacare eventually repealed.
Open enrollment began November 1 and will close January 31, 2016. You could call it Rahm’s revenge-the whole point of passing a more ambitious, more politically risky version of Obamacare was to get enough healthy people to buy coverage, and that’s exactly what hasn’t been happening.
Pipes, of the Pacific Research Institute, agrees that patients and overall health care outcomes will continue to suffer under the state exchanges as they’re now configured. That program, however, has paid only about 13 cents on the dollar of what was promised, mainly because fewer insurers than expected made money.
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“As a leader during this time of unprecedented transformation in healthcare, Anthem remains committed to enhancing access to high quality, affordable healthcare for all of our members inside and outside of the insurance exchanges and continuing our dialogue with policymakers and regulators regarding how we can improve the stability of the individual market”, Swedish said.
