Predictable: Nation’s Largest Insurer May Exit Obamacare Market Due to Losses

It would be wonderful if healthcare were truly free. If we lived in a world where we could magically conjure all the healthcare professionals and institutions needed to care for the sick and if these healthcare professionals were inclined to work for free, it sure would be nice.

In the real world, however, medical innovation is spurred by capitalist pursuits and a system that forces people to buy overpriced health insurance to attempt to offset the price of costly care is doomed to fail miserably.

In case anyone needs yet another lesson on the disastrous consequences of government-run healthcare, we need only look to the VA and their dismal record of providing care for veterans. That level of dysfunction is coming to a hospital near you (if it hasn’t already).

Underscoring the complete fiscal lunacy upon which Obamacare rests, the nation’s largest healthcare insurance provider, UnitedHealth Group, has announced that they are considering exiting the Obamacare market due to catastrophic losses in such a short amount of time.

“In recent weeks, growth expectations for individual exchange participation have tempered industrywide, co-operatives have failed, and market data has signaled higher risks and more difficulties while our own claims experience has deteriorated,” Stephen J. Hemsley, chief executive officer of UnitedHealth Group, stated in a press release.

The release added that,

“UnitedHealthcare has pulled back on its marketing efforts for individual exchange products in 2016. The company is evaluating the viability of the insurance exchange product segment and will determine during the first half of 2016 to what extent it can continue to serve the public exchange markets in 2017.”

The company claims to expect “earnings pressure” of $425 million, which “is driven by projected losses on individual exchange-compliant products related to the 2015 and 2016 policy years.”

When asked directly if the company can sustain these losses past 2016, Hemsley was blunt and straight-forward in a conference call with investors:

“No,” he said. “We cannot sustain these losses. We can’t really subsidize a marketplace that doesn’t appear at the moment to be sustaining itself.”

The company has run into the classic problem with collectivist ideology: UnitedHealth does not have enough healthy people willing to sign-up and fork-over money to offset the costs of the sick.

Obamacare rests upon a simple premise: make everybody sign-up for healthcare and fleece the healthy and the young by making them pay sky-high rates. They will statistically speaking, use little healthcare and will be paying substantially more for comparatively less.

This money is used to subsidize the costs of care for the elderly or the sick, populations that require more healthcare.

Further, the expansion of Medicare and Medicaid relies upon this “squeeze the middle and upper class” mentality.

To make matters worse, 2017 will be an even bleaker year for insurance providers as that is the year that federal backstops end. These backstops were designed to offset and reduce risks for insurers as Obamacare took effect. With these measures still in place, insurers are witnessing tremendous losses and an unsustainable business model and that will only get exponentially worse when the federal measures erode in 2017.

If UnitedHealth and other insurers exit the market, the remaining insurers will be forced to take-on even higher-risk clients and those costs will have to be offset by raising the rates of the healthy participants significantly- a move that is sure to prompt an exodus from the insurance market and a collapse of this ridiculous, failed Obamacare system.

Though the left crusaded for the disastrous healthcare overhaul by duplicitous means and outright lies, the inescapable fact is that a system that relies upon the “haves” paying for their care as well as the care of the “have-nots” is doomed to not only fail, but undermine the survival of the very institutions required to keep the sinking Obamacare ship afloat- institutions like UnitedHealth, who now must deal with severe losses.

Much of this could have been avoided is any of the buffoons who voted for Obamacare would have studied economics in high school or, alternatively, listened to the lengthy list of conservatives, business leaders and economists who warned that Obamacare would produce these kinds of consequences.

About the Author

Greg Campbell
Greg Campbell
An unapologetic patriot and conservative, Greg emerged within the blossoming Tea Party Movement as a political analyst dedicated to educating and advocating for the preservation of our constitutional principles and a free-market solution to problems birthed by economic liberalism. From authoring scathing commentaries to conducting interviews with some of the biggest names in politics today including party leaders, activists and conservative media personalities, Greg has worked to counter the left’s media narratives with truthful discussions of the biggest issues affecting Americans today. Greg’s primary area of focus is Second Amendment issues and the advancement of honest discussion concerning the constitutional right that protects all others. He lives in the Northwest with his wife, Heather, and enjoys writing, marksmanship and the outdoors.
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