Will other insurers ditch Obamacare?
THE WASHINGTON EXAMINER
By Paige Winfield Cunningham
11/20/15 12:01 AM
UnitedHealth Group’s threatened exit next year from Obamacare raises a dark question that could determine the future of President Obama’s healthcare law: Will other insurers follow suit?
It would be a sharp ding to Obama’s signature healthcare law should the nation’s largest insurer decide to stop selling plans through the law’s online marketplaces. United said Thursday it is considering pulling out after the current enrollment season ends in January, citing major losses from the Obamacare plans.
“We cannot sustain these losses,” CEO Stephen Hemsley said on a conference call. “We can’t really subsidize a marketplace that doesn’t appear at the moment to be sustaining itself.”
United also made reference to the nonprofit insurance plans set up under the healthcare law to increase competition, called co-ops. About half of them have shuttered, citing financial woes to the dismay of the Obama administration and other advocates for the healthcare law.
But while United’s exit would especially hurt consumers in states where it holds a large market share â€” including Nevada, Arizona, Texas, Missouri, Ohio and New York â€” the withdrawal of other big insurers from the Obamacare exchanges could mean more serious trouble ahead for the law.
United has sold plans to about 5.5 percent of the roughly 10 million Americans who use the marketplaces to get their insurance coverage, a relatively small market share, and is offering plans in 34 states this enrollment season.
But the company was relatively slow to participate in the exchanges compared with other insurance giants including Anthem, the company that operates Blue Cross plans, which dominate the markets in many states. All eyes in the coming weeks will be on the other big insurers such as Aetna, Anthem, Cigna and Humana, all of which watched their stocks fall dramatically falling United Healthcare’s announcement Thursday.
“The concern would be if other insurers are thinking to themselves what United said,” said Kaiser Family Foundation President Larry Levitt.
Hemsley largely blamed his company’s potential withdrawal from the marketplaces on some Obamacare consumers signing up for coverage and amassing big healthcare bills, only to later drop the coverage when they decide they can’t afford it, leading to big losses for the plan.
After the Obama administration reported in February that 11.7 million Americans had selected marketplace plans, that number had fallen 15 percent by June, when officials reported just 9.9 million had continued paying the monthly premium.
Since enrollment has been open for only two and a half weeks, United doesn’t have data on who will pay for it or not. But the company may have been pegging its hopes on stealing customers from other insurers that have sold on the Obamacare marketplaces from the start.
“I think what United might be able to tell from the first two weeks is whether they can grab market share from other insurers,” Levitt said. “They may be seeing they’re not making inroads.”