Obamacare was repealed

UHG, I think I recall correctly, sat out Obamacare’s first year, then in year two made an aggressive play to get in and feed at the exchanges troughs, and is now out with a forecast loss of $500M in the next year.


What happened?  Internally they couldn’t have been $500M mistaken about the market or the quality of the insuree pool right?

I doubt they were, it’s just that they thought the risk corridor program was going to backstop the loss until some equilibrium was reached.   It won’t….


….because the risk corridor pool doesn’t have a magical funding source, the Republicans having imposed iron clad budget neutrality on it in the Cromnibus of 2014.




With the PPACA fanboys and sycophants there’s this instinct to assert Obamacare is merely having ‘growing pains’.  And it would be another thing if SOME of these insurers were actually contributing excess premiums to the risk corridor pool to be paid out to subsidize the losses of others like was envisioned.   But they’re not.  Shorthand, its say $300M in receipts vs $3B in reimbursement requests.  Which means just about everyone doing PPACA is unprofitable.

Within the industry, it may have persisted for a while into this year either that the corridor pools were funded or that the administration was going to be able to pay the reimbursement claims in some off-book manner of dubious legality…. like they do a few other things with PPACA.  But with the co-ops being left to fail, it shows neither are true or possible.

UHG takes that as a signal.  They have to bail, or raise their premiums such that they’re not really competitive and with no guarantee the price hikes bring premiums / payouts to actuarial harmony.

More companies will follow, and the prudent thing is to not do PPACA business.  What you’ll soon have are PPACA exchanges with no companies offering policies.

Maybe ‘Obamacare’ lives on in name for sake of the 10 million in new subsidized coverees that have been added.  But for even that to happen, it’s got to be revisited and funded by Congress in the next 1 or 2 years.  At that point, the basic mechanism gets changed to something else and the Cadlliac tax, the mandates, the device tax and all that other BS go away.

Ya know, it basically gets changed into ‘high risk pools’… which was the real Republican idea for health care reform.

It’s going to be an astonishing turn-about.


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