Indiana News

United Health To Leave Affordable Care Act

INDIANAPOLIS, Ind. (WOWO): An IU health policy expert says insurance companies might deal a big blow to Obamacare.

Last week, UnitedHealth Group, the nation's largest health insurer, said it might withdraw from the Affordable Care Act's health exchanges after next year if it was unable to turn around what it called huge financial losses. While the exchanges only make up a small percentage of the company's business, United says it will lose $700 million on the exchanges this year, which it says includes $275 million in projected losses for next year.

The statement is a reversal of the optimism expressed by UnitedHealth officials last month. “The growth in the number of people signing up has been lower than expected, so those projections also may be falling short of what insurance companies were looking for as far as revenue,” said Kosali Simon, a professor who teaches health policy and health economics at IU's School of Public and Envrionmental Affairs.

Many insurance companies raised premiums for 2016 in states like Indiana that rely on the federal HealthCare.gov marketplace. Though the number of uninsured Americans has dropped under Obamacare, many are still not signing up for coverage – a July 2014 Gallup poll showed the uninsured rate at 13.4-percent. In addition to United, other large insurers say they are losing money, including Aetna and Cigna.

Anthem, based in Indianapolis and which agreed to acquire Cigna in July, said its Obamacare exchange business was profitable, but still complained that enrollment was less than expected. “One possibility is that (the insurance companies) were more optimistic about how they could manage the health care in these populations due to disease control management, and are now discovering that it is harder,” Simon said.

Why aren't more people signing up? Simon says there are several factors – some younger people believe it is still less expensive to pay the federal penalty for not having coverage. Others find that going to the doctor is still expensive sometimes even with insurance. “As some people discover that their plans have high deductibles, they may be less likely to sign up, or newer people aren't being brought into the insurance pool.”

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