Most likely, you saw it, but the news was eclipsed by your holiday hustle around Thanksgiving and the headlines about the “new normal” of terror attacks. America’s largest health care insurance company, UnitedHealthcare, issued its financial report, which included statements of regret and admission of error for its participation in Obamacare.
Just two weeks ago, in a corporate investors financial memo, United CEO Stephen Hemsley revealed the company’s greater-than-$700 million loss this year from the insurance product covering patients through the government-run Obamacare marketplace exchanges, with a projected loss of $425 million in the fourth quarter alone.
Hensley was clear in attempting to calm investors’ fears by announcing that its marketing efforts for the exchanges in 2016 would cease and a review was underway as to whether United would completely exit Obamacare in 2017. In summary, Hemsley said United’s entry into the ACA marketplace was “for us, a bad decision.”
United’s financial losses reflect similar failings of this approach by others offering ACA coverage. According to a NYPost.com story, McKinsey & Company observed that other insurers have “lost billions selling Obamacare plans in 2014, and the losses are mounting again this year.”
Remember, Obamacare is a two-pronged approach to government-run health insurance. One aspect is to expand states’ enrollments in Medicaid programs, which in Tennessee would be TennCare, by raising the federal poverty level criteria on income. The second feature of the ACA is the government-created marketplace, where uniform policies are purchased with higher deductibles. Through these efforts, you will recall, Americans were supposed to keep their plans or doctors if they liked them and each family was supposed to save $2,500 on premium costs annually.
Instead, most states that expanded their state’s Medicaid programs are in a deficit spending situation, where the federal dollars are vastly insufficient to cover the costs of these insurance policies. Not only are the for-profit companies offering ACA marketplace plans losing money, but so are the 23 Obamacare co-ops funded by your tax dollars as lower-cost alternatives.
Bottom line, Obamacare is failing. Ironically, the insurance companies were among the biggest spenders in the world of political lobbying for passage of the ACA and the expansion of Medicaid. Now, with billion-dollar losses mounting, guess what’s happening?
A provision in the Democrats’ law created “risk-corridor payments” to reimburse insurance companies for up to 80 percent of their reported financial losses. This provision has triggered the request in 2014 of $2.9 billion in government bailouts, but the actual reimbursement is at 12.6 percent of what insurance companies claim they’re “owed.”
Why is Obama’s administration not covering its promises? Well, the Department of Health and Human Services’ fund for these repayments has only collected $362 million.
Another pathetic aspect of this, as insurers want your tax dollars to cover their mistakes, is in the loudest voice calling out the Obama administration, America’s Health Insurance Plans, headed up by CEO Marilyn Tavenner. She was the former administrator of the Centers for Medicare and Medicaid Services that helped create and roll out the ACA.
Taxpayers beware: Massive political and policy failure comes with a high cost, and those who bought this pig in a poke now want you to pay.
Robin Smith, a former chairwoman of the Tennessee Republican Party, is owner of Rivers Edge Alliance.