It’s not surprising that UnitedHealthcare is high-tailing it out of Arizona’s health-insurance marketplace. The exchanges — a major part of the Affordable Care Act — are money losers. Not enough young, healthy people have signed up in Arizona and elsewhere to use the plans. Some rural counties in Arizona may have no options on the exchange, which could complicate things for those who are required to have insurance but don’t qualify for coverage through an employer.

The exchanges have never been viable options for healthy, working people. They are not affordable for those who are in the middle class and patients have to be careful to choose a plan that offers decent doctor choices.

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The Mercatus Center at George Mason University released a new working paper on the Affordable Care Act. The study, authored by Brian Blase of the Mercatus Center, Doug Badger of the Galen Institute, and Ed Haislmaier of the Heritage Foundation contains two key findings:

First, insurers incurred substantial losses overall despite receiving much larger back-end subsidies per enrollee through the ACA’s reinsurance program than they expected when they set their premiums for 2014. Second, it is estimated that in the absence of the reinsurance program, insurers would have had to set premiums 26% higher, on average, in order to avoid losses—assuming implausibly that the overall health of the risk pool would not have worsened as a result of the higher premiums. The findings raise serious questions about the ACA’s future, particularly when the reinsurance program ends and premium revenue must be sufficient to cover expenses.

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One of the reasons that ACA Exchange plans are losing money is their inability to attract enough healthy enrollees. Healthy people are, disproportionately, young people. And large numbers of young adults don’t have to enroll in ACA Exchange plans – because the ACA mandates that their parents’ employer provide them with coverage, and that coverage is almost invariably priced lower.

Anyone up to age 26 with a parent who has employer-based health coverage that includes dependents can enroll in the parent’s plan. This is called the “dependent care mandate,” and is a requirement of the ACA. There are no other requirements for this coverage option: the “child” does not have to live with the parent or be financially dependent or a dependent for tax purposes on the parent. The “child” could be employed and eligible for employer-based coverage on his/her own, but elect to take the parent’s coverage if it’s preferable.

Exchanges are being undermined, in part, by the ACA’s dependent care mandate.

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On Tuesday UnitedHealth Group reported a terrific first quarter, with strong performance across nearly all business lines. There was one exception: The conglomerate’s insurance exchange unit raised its projected Affordable Care Act losses for 2016 to $650 million from $525 million, after booking $475 million in red ink last year.

CEO Stephen Hemsley said ObamaCare’s instability, small market size and costly patient population “continue to suggest we cannot broadly serve it on an effective and sustained basis.” He said UnitedHealth will withdraw to “only a handful of states” in 2017.

Normally sedate insurance markets have been roiled by everything from the federally chartered co-op failures to enrollment well below projections. ObamaCare’s architecture also makes it economically rational for consumers to wait until they are about to incur major medical expenses to get covered, and administratively created “special enrollment periods” encourage such gaming.

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United Healthcare’s announcement that it is pulling out of most of the exchanges established by the Affordable Care Act is one of many indications of the law’s continuing instability.

There are many other insurance plans in the same boat. Blue Cross Blue Shield plans have dominated the individual and small-group markets in most states for decades. If they were to abandon this market, they would have less ability than United does to grow their business elsewhere. But many of these plans are nonetheless contemplating such a move.

ObamaCare isn’t likely to enter an insurance death spiral; there’s too much federal money propping the whole thing up. But it isn’t on track to become a stable, self-sustaining insurance pool either, because very few middle-class families want to get their insurance through the exchanges. Which means the law is not only unstable financially, it is politically unstable as well.

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The Obama administration has published rules that “will make it impossible to offer HSA-qualified plans in the future” in the ACA exchanges, according to HSA expert Roy Ramthun. That’s because plans offered in the exchanges must comply with HSA and new ACA rules that conflict. This is one more way in which the ACA is limiting options to people getting coverage through the Obamacare exchanges, giving enrollees fewer of the options available to those with private and employer coverage outside the exchanges.  Nationwide, nearly 20 million people were enrolled in HSA-qualified plans last year.

Amid rising drug and health care costs and roiling market dynamics, the spokesperson for the nation’s health insurers is predicting substantial increases next year in ObamaCare premiums and related costs.

Without venturing a specific percentage increase, Marilyn Tavenner, the president and CEO of America’s Health Insurance Plans, said in an interview with Morning Consult that the culmination of market shifts and rising health care costs will force stark increases in health insurance rates in the coming year.

The warning to consumers from Tavenner, the former administration official who headed the Center for Medicare and Medicaid Services and oversaw the disastrous launch of HealthCare.gov, the ObamaCare website, comes at a time of growing uncertainty about the evolving makeup of the ObamaCare health insurance market.

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UnitedHealth is withdrawing from most of the 34 ObamaCare Exchanges in which it currently sells, citing losses of $650 million in 2016. A recent Kaiser Family Foundation report indicates UnitedHealth’s departure will leave consumers on Oklahoma’s Exchange with only one choice of insurance carriers.

Michael Cannon of the Cato Institute explains five results of UnitedHealth’s withdrawal from the exchanges:

1. UnitedHealth’s departure shows ObamaCare is suffering from self-induced adverse selection.

2. UnitedHealth’s departure is bad news for other carriers.

3. UnitedHealth’s departure shows ObamaCare premiums will continue to rise.

4. There will be more exits.

5. UnitedHealth’s departure shows quality of coverage under ObamaCare will continue to fall.

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After six years of Obamacare and three years of the exchanges Americans have learned a few lessons. The healthcare.gov disaster was due to the complexity of the website, an awful procurement system, and lack of adequate management by the administrationg. Establishing an insurance company is more than just paying claims, as you can see with the failure of half of the co-op insurers around the country. Finally, people don’t want to spend a lot of money on insurance.