Obama care insurance bailout coming
Time to institute the cadillac tax and make it retro active to 1-1-2014. The rich are not paying their fair share.
UnitedHealthcare’s Thursday bombshell rattled investors, health-plan subscribers and ObamaCare partisans. The insurer currently covers more than half a million ObamaCare plan subscribers in 23 states, including New York, New Jersey and Connecticut.
The insurer announced losses of $425 million on ObamaCare plans, and CEO Stephen Hemsley said, “We cannot sustain these losses,” and “we saw no indication of anything actually improving.”
Hemsley pointed to enrollees who were older and sicker than expected and in many cases gamed the system by waiting until they were ill to sign up. “We can’t subsidize a market that doesn’t at this point appear to be sustaining itself.”
When UnitedHealthcare speaks, the industry listens. It’s the nation’s largest insurer. And the problems it faces are slamming all insurers.
According to the consulting firm McKinsey, insurers lost billions selling ObamaCare plans in 2014, and the losses are mounting again this year. On Friday, Aetna also conceded it is losing money on ObamaCare.
Similar pressures already have forced a dozen insurance ObamaCare co-ops out of business, including the New York giant insurer Health Republic. If enrollments continue to stagnate, it’s likely other insurers will follow UnitedHealthcare and jump ship.
On Thursday, the administration tried to calm insurers, sending them a written memo full of promises. Obama’s Department of Health and Human Services vowed to go to Congress for full funding to reimburse insurers for their losses.
At issue is the Affordable Care Act’s so-called “risk corridor” program. Profitable insurers are supposed to pay into a fund every year to help unprofitable insurers. But with nearly all insurers losing money on ObamaCare, there’s not enough money in the pot. Insurers requested $2.9 billion to offset their 2014 losses, and were told they would get only 13 cents on the dollar, because the pot is so empty.