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.
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The company plans to evaluate during the first half of next year whether it would continue to offer Obamacare plans in 2017.
UnitedHealth, the biggest US health insurer, added that it might withdraw from the Affordable Care Act’s exchanges.
“In recent weeks, growth expectations for individual exchange participation have tempered industry-wide, co-operatives have failed, and market data has signaled higher risks and more difficulties while our own claims experience has deteriorated, so we are taking this proactive step”, CEO Stephen J. Hemsley said in the report.
UnitedHealth expects 2015 earnings of about $6 per share, down from its previous forecast for $6.25 to $6.35 per share.
Aetna shares, which had fallen 7 percent on Thursday, rose 4.1 percent to $103.97 on Friday.
Something to keep in mind, though – the government released a statement the same day as United’s announcement admitting it hasn’t paid almost as much money as promised to help insurers recoup the losses everyone was expecting for Obamacare’s early years.
UnitedHealth has also stopped marketing of its Obamacare exchange plans for 2016, as it no more wants to incur additional losses.
“That’s certainly something that other carriers so complained about”, Hempstead points out, though she said it’s unclear if UnitedHealth was in a few way uniquely affected by that trend relative to other insurance carriers.
The analysis is based on the Commonwealth Fund’s Health Care Affordability Tracking Survey conducted in July and August, and focuses on 1,687 adults, the majority of which were privately insured.
The Medical Loss Ratio (MLR) rule, also known as the 80/20 rule, is one of the tools created through the Affordable Care Act to keep costs affordable for consumers.
To be sure, over the long term, that could change, because the subsidy calculation has a weird time bomb in it. Right now, subsidies are calculated so as to make the second-cheapest Silver plan on the exchange cost a fixed percentage of your income, or less. Anthem also said last month business on the exchanges was a challenge, according to the report. But we can’t dismiss the possibility of gaming, either – or that healthier people are dropping insurance as they realize they won’t hit their deductible. Kaiser covers about 450,000 people in nine exchanges, and a spokeswoman said they are confident that the business is financially stable.
Next year, the percentage threshold goes up to 2.5 percent from 2 percent in 2015, with a maximum the average cost of a bronze plan sold through the exchanges. “When health plans can not rely on the government to meet its obligations, individuals and families are harmed as a result”.
In a securities filing, Centene Corp. said its ACA business “continues to perform in line with expectations”.
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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.
