ACA Death March

More dark clouds on the exchange horizon

12 of the 23 non-profit exchanges have gone the way of the buffalo. Thursday (19 Nov 2015) UnitedHealth, America’s largest insurer, stated that if it can’t turn a profit (which it almost certainly cannot), it will quit the health plan marketplace. Now we watch and wait.

The fate of Obama’s signature health care law depends on how long the other two big players, Anthem, Inc. and Aetna, are willing to wait before they see a profit. Now that United is gone, the two insurers likely control the fate of the entire health care law. While true that United had a relatively small share of the market, Aetna has already stated that its losing money and Anthem is barely breaking even. United’s shares have dropped about 6%, while Aetna and Anthem fell even more. Investors are concerned as analysts predict that both companies are likely to lose money on the exchanges in 2016. If the situation does not improve in 2016, it is likely that both big payers will pull chocks and head for the hills, in spite of C-suite rhetoric to the contrary.

HHS (Ben Wakana) counters this grim news by pointing out that more people are signing up for health insurance. He didn’t mention the fact that insurers are having difficulties because the administration is paying out claims at less than 13% of what the insurers were told to expect. Evidently, the risk pool is more toxic than President Obama imagined.

But, if things don’t work out for the insurers, they can always be bailed out, right? Way too big to fail.