Obama-Scare: Biggest US Health Insurer Might Leave Exchanges

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The nation’s largest health insurer fired a shot across the bow of ObamaCare on Thursday, citing flagging enrollment and high-risk customers in suggesting it may have to pull out of the exchanges in 2017.

Published November 19, 2015

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ObamaCare’s 2016 open enrollment proves underwhelming

The nation’s largest health insurer fired a shot across the bow of ObamaCare on Thursday, citing flagging enrollment and high-risk customers in suggesting it may have to pull out of the exchanges in 2017.

UnitedHealth Group raised the alarm in an earnings update Thursday morning, with CEO Stephen J. Hemsley warning of dimming conditions in the market.

He pointed to lower enrollment forecasts and a concern that the exchanges are increasingly taking on less healthy – and therefore more costly – customers.

“In recent weeks, growth expectations for individual exchange participation have tempered industrywide, co-operatives have failed, and market data has signaled higher risks and more difficulties while our own claims experience has deteriorated,” he said in a statement.

As the company cut its earnings outlook, it also announced it was pulling back on marketing for the ObamaCare exchanges in 2016 and said it would make a decision on the exchanges in the middle of next year.

The company said: “The Company is evaluating the viability of the insurance exchange product segment and will determine during the first half of 2016 to what extent it can continue to serve the public exchange markets in 2017.”

Even the suggestion of exiting the exchanges is significant.

According to Bloomberg, UnitedHealth still covers just 550,000 people on the exchanges. But the actions of one mega-insurer could have a ripple effect in an increasingly consolidated insurance industry.

Aetna announced a merger earlier this year with Humana, while Anthem announced a deal with CIGNA. Before the Aetna deal, the Wall Street Journal reported that UnitedHealth also had approached Aetna about a takeover.

2017 is an important year because that’s when government programs that effectively compensate insurers for taking on more costly customers will end. The key factor may be how the current enrollment period goes.

The Obama administration earlier this year announced they expect 10 million people to be covered through the exchanges by the end of 2016, lower than original Congressional Budget Office estimates. Insurance companies still continue to make money through employer-sponsored care as well.

An official with the Department of Health and Human Services said Thursday that the marketplace will stabilize.

“The Health Insurance Marketplace is entering its third year and continues to grow, giving millions of Americans access to quality affordable insurance,” an HHS spokesman said in a statement. “As we’ve seen during the first two weeks of Open Enrollment, every day, tens of thousands more Americans turn to the Health Insurance Marketplace for health coverage and even more return to the Marketplace for another year.”

Fox News’ Rich Edson contributed to this report.