UnitedHealth hasn’t been alone in endorsing the exchange business, which amounts to a small slice of income for major insurers.
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Shares of Molina and other insurers plunged Thursday after UnitedHealth Group cut its 2015 forecast, reported deep losses from its exchange business and said it will decide next year whether it wants to continue in that market. The insurance giant might also be using the news to prod the administration into making changes to the law, or paying more of what the federal government owes insurers under one of the programs aimed at protecting them from losses in the early years.
No more than five minutes after she began, she stopped her speech for a man who appeared to faint.
Anthem remains committed to the exchanges and to “continuing our dialogue with policymakers and regulators regarding how we can improve the stability of the individual market”, Chief Executive Officer Joseph Swedish said in a statement.
Hemsley told analysts that the company would have earned more than $6.40 per share this year if it had done no business on the exchanges.
Just a month ago, UnitedHealth said that it was expecting substantial improvement for the Obamacare business in 2016. Aetna and Anthem had referred back to earlier comments when asked on Thursday about UnitedHealth’s commentary.
The S&P 500 index of healthcare facilities.SPCOMHCLT was up 2.9 percent Friday after falling 5.7 percent Thursday.
In the exchanges’ third year, the number of plans offered “continues to grow, giving millions of Americans access to quality affordable insurance”, Ben Wakana, a spokesman for the U.S. Department of Health and Human Services, said in an emailed statement. In addition, the insurer said it was contemplating exiting the Obamacare exchange market in 2017, raising concerns about the viability of the insurance exchanges, and sending the health insurance sector tumbling. United moved only gingerly into the exchange market, participating in only five states in 2014 and 15 this year.
In the most recent case, federal and state officials ordered Health Republic Insurance of NY to close by November 30 after it was revealed that it owed hospitals an estimated $150 million in receivables.
The insurer backed its full-year 2015 earnings forecast. People who purchase insurance through the public exchanges are typically heavy users of their plans, draining insurers’ profits, analysts say.
Anthem operates in 14 exchange states.
Covered California said this week that 34,000 new enrollees had picked out a health plan since November 1. So if the biggest company can’t make money on the president’s signature health policy, the narrative followed, can anyone?
“If they exited (the exchanges), it wouldn’t matter that much to the functioning of the ACA, but it would show why increasing enrollment is so important”, Levitt said.
Investors seemed to agree, driving down UnitedHealth Group’s stock, Aetna’s stock, Humana’s stock and Anthem’s stock in equal measure.
The risk corridor program works by comparing each insurer’s “allowable costs”-claims plus other allowable expenses – with the insurer’s “target amount” – determined through a formula that subtracts administrative expenses from premiums collected”.
“We’ve been very clear with the administration about the serious challenges facing consumers and health plans in this exchange market”, said America’s Health Insurance Plans President and CEO Marilyn Tavenner.
In MA, which elected to expand Medicaid coverage, BlueCross/BlueShield has been the largest insurer of individuals on the exchange. Mr. Gorman says the company should have waited at least four years to give the marketplaces time to stabilize.
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The losses happened even after UnitedHealth chose to sit out the first year under the Affordable Care Act, and in Hemsley’s words, entered the market last year “in a measured fashion”.
