UnitedHealth announced in an earnings call today it will be exiting Obamacare exchanges in some states in 2017 due to the costliness of covering people actually using the exchanges. While conservatives have been pounding Obamacare for this decision, they aren't realizing the UnitedHealth move proves the need for a single-payer system. Don't believe me? That's fine. Let's ask UnitedHealth CEO Stephen Hemsley exactly why his company is leaving the exchange.
The ObamaCare market has been smaller and costlier than expected, partly due to the number of sicker enrollees.
“The smaller overall market size and shorter term, higher risk profile within this market segment continue to suggest we cannot broadly serve it on an effective and sustained basis,” Hemsley, the UnitedHealth CEO, said on the earnings call in explaining the company’s move.
Did you catch that? In other words, UnitedHealth is a health insurance company that can't afford to insure sick people. And it should be specifically noted that UnitedHealth was not typically offering the cheapest plans. A recent analysis by the Kaiser Family Foundation stated, "United does not generally offer low premium plans in the Marketplaces."
So, what appears to have happened is UnitedHealth assumed they would get tons of healthy people to feed off of their teat but priced their coverage too high. Healthy people took the cheaper coverage while sicker people took UnitedHealth. Now, UnitedHealth has announced they can't cover the sick without acknowledging they priced themselves out getting healthier folks on their rolls. If only they could go back to blocking people with preexisting conditions from getting on their rolls or tossing sick people off, the company could thrive. Or maybe the company just wasn't that efficient to begin with...
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