Yesterday I blogged about the fact that United Health, once a big proponent of ObamaCare, is running, not walking, out of most of its exchanges.
Here, drawn from Tom Murphy’s article for the Associated Press, is more information on why:
United Health’s CEO, Stephen Hemsley, has informed us that the company’s losses for 2015 – 2016 will exceed $1 billion dollars.
The current estimated loss of $650 million for year 2016 is up from the previous estimate of $525 million. In other words, it was expected that things were horrific…and it turned out that they were even more horrific.
The losses, of course, are due to high risk, high cost people in ObamaCare, many of whom either do not pay at all or are heavily subsidized.
Amazingly (if you believe the ObamaCare people who will try to convince you this was unforseen), younger people are less than taken with the idea of paying the difference.
And that is before we get to the companies which are turning full-time jobs into part-time jobs so that employees do not work enough hours to be put on ObamaCare (which, not incidentally, is a major reason it looks like so many new jobs are being created).
UnitedHealth currently services about 800,000 clients in 34 states. Now, according to the article, it will drop back to “only a handful of states next year”.
And you can bet that handful is going to get smaller still.
ObamaCare. An unworkable monstrosity. Right from the start.
This is called the “Insurance Death Spiral”. Higher and Higher rates push out the healthier people, leaving the very sick. This Adverse Selection of risk eventually means you mostly have the really sick who cost far more than any possible premium.
The actual basis of insurance is to spread the risk of highly infrequent incidents over a population of relatively healthy people. ObamieKare is forcing out the healthier people who need the money to eat and pay rent.
ObamieKare deductibles are incredibly high. The monthly premiums are quite high. The healthy people are subsidizing the very sick.
There is NO PENALTY for not signing up for ObamieKare — unless you have an income tax refund coming. The government can attach your refund, but they can’t sue you.
IMHO, the solution is Health Savings Accounts with national subsidies to the very sick.
Zeke – I’m no health professional and don’t know what the best answer is. But there is little doubt that it isn’t ObamaCare.