• January 24, 2022

It’s Working: America’s Largest Heath Insurer Pulls Out Of Obamacare In California

At the onset of 2016, a number of health insurers began sounding the alarm about Obamacare’s financial sustainability and worrisome enrollment trends.  In early April, America’s largest insurer announced its withdrawal from a handful of state exchanges created under the law.  Several weeks later, UnitedHealth dropped a bigger bomb on the unpopular program, unveiling its plan to exit a large majority of state-level marketplaces in 2017.  Obamacare defenders spun the major development as insignificant, but their efforts were weak — especially in the midst of sharply rising premiums, swelling out-of-pocket costs, reduced enrollment data, and nonpartisan projections that the nation’s uninsured rate will actually increase over the next decade.  One glimmer of good news buried within UnitedHealth’s portentous maneuvering was the company’s apparent decision to remain a player in Covered California, Obamacare’s largest state exchange.  Consider that glimmer extinguished:

UnitedHealth Group is leaving California’s insurance exchange at the end of this year, state officials confirmed Tuesday. The nation’s largest health insurer announced in April it was dropping out of all but a handful of 34 health insurance marketplaces it participated in. But the company had not discussed its plans in California. UnitedHealth’s pullout also affects individual policies sold outside the Covered California exchange, which will remain in effect until the end of December. “United is pulling out of California’s individual market including Covered California in 2017,” said Amy Palmer, a spokeswoman for the state exchange…In April, UnitedHealth’s Chief Executive Stephen Hemsley saidthe company was unwilling to keep losing money on the exchange business overall. “The smaller overall market size and shorter term, higher-risk profile within this market segment continue to suggest we cannot broadly serve it on an effective and sustained basis,” Hemsley said in a conference call with investors…

That CNN Money story goes on to note that UnitedHealth wasn’t a major factor in California’s marketplace thanks to state-imposed limitations, which were triggered by the company’s decision not to join Covered California in 2014 or 2015. But after just one year on the scene, the health insurance giant has seen enough — drawing attacks from Obamacare officials, who blame the insurer’s business practices for their losses, as opposed to their failing law. This impotent blame-storming is belied by the ugly nationwide numbers and anticipated losses driven by risk pools that skew older and sicker (and therefore more expensive) than expected. The nation’s insurers may have sustained even heavier losses if not for the Obama administration’s payment of billions in subsidies using funds not approved by Congress. The New York Times reports this week about the ongoing fight about those hotly-disputed payments, over which Republicans have successfully sued the White House. Secrecy and lawlessness:

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