Obamacare claims its first major exchange casualty as health insurance giant UnitedHealth bails over unsustainable costs

(BigGovernment.news) President Barack Obama’s signature legislation continues to unravel and has now claimed its first major health insurance victim.

Top officials at UnitedHealth, the nation’s largest health insurer, said earlier this week the company would begin pulling out of most of the insurance exchanges crated by Obamacare by 2017 because it can no longer offer sustainable plans after losing more than $1 billion in just two years. The Associated Press reported further:

UnitedHealth Group Inc. said it now expects to lose $650 million this year on its exchange business, up from its previous projection for $525 million. The insurer lost $475 million in 2015, a spokesman said.

The AP noted that UnitedHealth has already made the decision to pull out of Arkansas, Georgia and Michigan in 2017. Company CEO Stephen Hemsley told analysts on Tuesday during an A.M. conference call that he won’t allow the company to carry financial exposure from the exchanges into 2017.

“We continue to remain an advocate for more stable and sustainable approaches to serving this market,” he said.

Probably in anticipation of just how badly this was all going to end, UnitedHealth crept cautiously into the exchange market in their first year, which was 2014. After that the company expanded to two dozen exchanges in 2015 and said in October it planned to add to that total. At present, it operates in exchanges in 34 states and covers 795,000 people. But just a month after voicing its intentions to expand further the company began having second thoughts. In November, the massive insurer announced that it would decide in the first half of 2016 whether it would even be in the market next year.

“The state-based exchanges are a key element behind the Affordable Care Act’s push to expand insurance coverage. But insurers have struggled with higher than expected claims from that business,” AP reported.

Struggled, indeed – so much so that premiums have had to be raised substantially, as well as out-of-pocket deductibles, the latter of which are sometimes thousands of dollars per year now. That’s “health care coverage,” but in word only.

UnitedHealth is far from the only health insurer that has lost money. A dozen nonprofit insurers that were created by the Affordable Care Act have already shuttered, and the remaining survivors all lost tens of millions of dollars last year as well. The vanquished and the survivors alike say the same thing: They have struggled with customers who signed up for coverage outside regular enrollment windows and then dumped expensive claims on them, a problem the government has said it would address (but in reality will only make worse or perpetuate with bailouts).

None of this should surprise anyone. Experts were predicting this would happen years ago – that the sicker, less healthy population would outnumber the young, healthy population on the ACA exchanges driving up costs (while driving down profits) for the insurance companies short-sighted enough to get into them. Assurances by this government are about as good as the promises its leader – Barack Obama – made regarding his signature legislation in the first place.

Next up: Employers, squeezed and squeezed and squeezed by the administration’s endless stream of expensive regulations and the labor movement’s asinine quest for an outsized minimum wage will begin dumping their insured into the exchange markets as well – something else that was predicted – because they won’t be able to afford to cover their health insurance costs, and all at a time when insurers are bailing from them.

Obamacare could not have been a worse effort to “reform” the U.S. healthcare system, which has now hopelessly mired in steep decline thanks to Left-wing social change artists who are more concerned about votes and power than doing the right thing for the American people and the markets that used to serve them much better.

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