It’s still too early in the law’s implementation, Jon Kingsdale, a director of Wakely Consulting and former director of the insurance exchange in MA, says, to declare Obmacare in trouble.
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But in its unexpected disclosure Thursday, the insurer said it would cut its earnings forecast and projected hundreds of millions in losses stemming from the policies it sells through the health law’s marketplaces.
UnitedHealth was never the exchanges’ biggest fan. It approached the market timidly in 2014, the exchanges’ first year, offering coverage in only a few markets. Combined with health-savings accounts (HSAs), those plans offered a rational approach to balancing health and economic requirements, especially for younger consumers who rarely need more than one or two clinic visits a year, which would cost far less than either comprehensive-coverage premiums or deductibles even in the pre-ACA era.
Anthem Blue Cross Blue Shield participates in 14 state exchanges. December 15 is the last day to enroll in or change plans for new coverage to begin on January 1, 2016. Molina has said it has around 226,000 exchange enrollees.
The company’s late start allowed competitors Aetna (NYSE:AET) and Anthem (NYSE:ANTM) to get a valuable head start in signing up members, but UnitedHealth Group’s expansion into additional states this year did allow it to sign up more than a half a million members through Obamacare.
UnitedHealth’s announcement about the ACA exchanges was surprising because, as recently as a month ago, the company was touting future growth prospects for that business.
Open enrollment for 2016 is underway and citizens who have not yet secured health insurance or are unhappy with their current coverage are encouraged to attend an informational event Saturday to learn about and discuss health care options.
“It’s kind of like a roller coaster right now”, McBride said.
High-deductible plans are part of the problem, Dr. Ezekiel Emanuel added. And the Obama administration announced it expected only 10 million people to be covered by exchange policies by the end of 2016, just a little higher than this year’s goal of 9.1 million.
Health insurers and health-policy analysts immediately began to wade through the voluminous regulatory language that spells out the details.
“We’re not trying to be all things to all people”, he said.
Indeed, House Government Oversight and Reform Committee Chairman Jason Chaffetz, R-Utah, and three subcommittee chairmen sent a letter to CMS on Friday asking for documents regarding its oversight of the ACA exchanges and co-ops. If broad networks like UnitedHealth’s prove unprofitable, narrower networks will become the norm.
The proposal does not provide a new source of money for those payments, but it would tweak the method used to calculate how much money each insurer needs to pay or is owed under a related program also meant to ease the burden on insurers with big pools of sick patients.
Clayton-based Centene, for instance, plans to expand its Obamacare business after acquiring California-based Health Net. Chief Executive Mario Molina said the company wasn’t seeing the issues UnitedHealth flagged.
The Obama administration said UnitedHealth’s announcement isn’t a sign of larger problems.
Under ObamaCare, health insurance companies that lose money can seek taxpayer funds to cover their losses. It hasn’t abandoned the exchanges yet, although it is scaling back marketing for 2016 and will consider pulling out in 2017.
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South America’s sixth-largest economy is pulling out of a slump more slowly than expected as the price of copper, its biggest export, extends a four-year slide while spending bottlenecks crimp public investment. They still, however, will find a viable and competitive marketplace, with or without UnitedHealth.
