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June 1 2016

UnitedHealth Won’t Be California Dreamin’ Much Longer

Patrice L. Onwuka

UnitedHealth, the nation’s largest health insurance provider has made waves in the healthcare industry as it pertains to ObamaCare--it has led the exodus of healthcare providers from ObamaCare exchange marketplaces.

In 2015, UnitedHealth warned that if things didn’t turn around with ObamaCare, they would be forced to pull out to avoid sustained losses. It made good on that promise earlier this year when the company announced that it would pull out of all but just a handful of the 34 states it was operating in. UnitedHealth has already said it will pull out of Arkansas, Georgia and Michigan. Now, California has been added to that list of abandoned states.

United’s current Cali customers will continue to have their services through this year, but should start shopping around now for coverage during the open enrollment period this fall.

CNN Money reports:

UnitedHealth's pullout also affects individual policies sold outside the Covered California exchange, which will remain in effect until the end of December.

"United is pulling out of California's individual market including Covered California in 2017," said Amy Palmer, a spokeswoman for the state exchange.

It's expected that UnitedHealth will continue offering coverage to employers in California and to government workers and their families through the California Public Employees' Retirement System.

... In April, UnitedHealth's Chief Executive Stephen Hemsley said the company was unwilling to keep losing money on the exchange business overall.

"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 said in a conference call with investors in April.

Apparently, the head of Covered California, the state’s exchange, blamed the insurer for sitting out the first two years of ObamaCare in California and recently fired back against UnitedHealth’s claims of losses blaming the insurer for bad business decisions:

Lee said UnitedHealth made a series of blunders on rates and networks that led to steep losses on individual policies across the country.

"Instead of saying, 'We screwed up,' they said, 'Obamacare is the problem and we may not play anymore,'" Lee said in a February interview with California Healthline. "It was giving an excuse to Wall Street and throwing the Affordable Care Act under the bus."

UnitedHealth’s pullout is not expected to have a major effect on the California ObamaCare marketplace because UnitedHealth only provided coverage for about 1,200 customers in the state. However, when the insurer entered the ObamaCare state exchange, it was welcomed as a new choice among the few available.

UnitedHealth stands as a bellwether for other insurers and has been the most vocal about what most –if not all- of the other insurers are experiencing, but are too afraid of the Obama Administration to admit publicly.

The company also plans to pull out of Illinois this fall according to a key official. It’s likely because Illinois has been crippled by losses.

All of this confirms that ObamaCare continues to be flop for the Administration in that it has failed to replicate a

Older, sicker Americans are drawn to new coverage through ObamaCare, but not the young and healthy who are needed to balance out the costs of high-use customers. And the price tag for ObamaCare is artificially lowered because of taxpayer subsidies. We got what we paid for with the President's signature healthcare bill, a bundle of surprises that leave us worse off.

Independent Women's Forum is an educational 501(c)(3) dedicated to developing and advancing policies that aren’t just well intended, but actually enhance people’s freedom, choices, and opportunities. IWF is the sister organization of the Independent Women’s Voice.​
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