UnitedHealthcare Cries Uncle
On Tuesday, April 19, UnitedHealthcare CEO Stephen Hemsley announced that the company would be pulling out of most of the Affordable Care Act’s (ACA), or Obamacare, marketplace exchanges. This announcement did not come as a surprise. On November 19, 2015, The Hill reported, “At a shareholder meeting Thursday, UnitedHealthcare cast doubt on its ability to carry plans on the healthcare law’s exchanges beyond 2016, offering a more grim financial outlook than it had previously expected. ‘In recent weeks, growth expectations for individual exchange participation have tempered industrywide,’ said Stephen Hemsley, the company’s CEO. ‘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.’”
Almost since its inception, hundreds of healthcare policy experts have predicted Obamacare’s demise because of its expensive mandated benefits, over-regulatory reach, and its Washington-controlled structure. Citizens Against Government Waste (CAGW) has written numerous articles in its blog The Swine Line and monthly newsletter WasteWatcher about the regulatory and financial problems with the healthcare reform law. In fact, just four months ago, our January blog discussed how Humana was thinking of pulling out of the exchanges by the end of 2016 if the market does not turn around for them. Humana expects to lose 300,000 customers in 2016.
More than half of the non-profit Obamacare-created CO-OPs have collapsed, wasting billions of tax dollars. It’s predicted that most will eventually go under, in spite of the dubious accounting gimmicks the Obama administration provided to keep them afloat.
Several state-run exchanges are in fiscal trouble and have turned their operations over to the federal exchange. With UnitedHealthcare pulling out, there will be fewer choices for consumers and that will lead to less competition and higher costs. Ditto that if Humana decides to follow UnitedHealthcare’s decision. The death spiral is continues.
Obamacare remains unpopular and it is a 2016 campaign issue. If the Republicans should win the presidency, they may not have to repeal Obamacare after all, since it seems likely it will not be around for much longer. Instead, expect them to offer a market-based alternative that would put the purchasing power directly into the hands of all consumers, allowing them to buy the kind of health insurance that fits their needs; returns regulatory power back to the states; and protects people with low-incomes and pre-existing conditions.
