For years, first at the Washington Post's Wonkblog and now at Vox, Sarah Kliff has been happily chirping away about the wonders of Obamacare. She has been perhaps its biggest cheerleader by far. And then the predictable collapse of its cooperatives hit and now poor Sarah has gone silent on the whole topic of Obamacare since November 19 when she sadly delivered apocalyptic news about the nation's largest health insurer, UnitedHealth:
UnitedHealth is the country's largest health insurer. And on Thursday, it dropped a bombshell: The company told investors that it may withdraw from the Obamacare marketplaces due to poor financial performance.
Chief executive Stephen Hemsley told investors that United would decide in early 2016 whether to sell on the marketplaces the following year. "We cannot sustain these losses," he said. "We can't really subsidize a marketplace that doesn't appear at the moment to be sustaining itself."
...But in the long term, United pulling out of Obamacare might signal something even more troubling: that the marketplaces aren't a good business decision for other large carriers.
According to this report from two days ago, it now looks pretty certain that UnitedHealth will be splitting from Obamacare:
UnitedHealthcare plans to stop paying commissions for insurance policies offered through exchanges beginning Jan. 1, a move brokers say signals the company’s retreat from Obamacare business.
“That’s typically always the first thing to go if they’re going to start pulling out of a specific market or not offering those programs any longer,” said Tim Tracy Jr., a Fairfield insurance broker and president of the Connecticut Chapter of the National Association of Health Underwriters.
It's kind of hard to break out the Obamacare pom-poms to cheerlead such news but it gets worse, much worse. Obamacare co-ops are collapsing all around our Miss Sarah including the only co-op to show a profit last year as reported by the Associated Press yesterday:
The lone health insurance cooperative to make money last year on the Affordable Care Act's public insurance exchanges is now losing millions and suspending individual enrollment for 2016.
Maine's Community Health Options lost more than $17 million in the first nine months of this year, after making $10.9 million in the same period last year. A spokesman said higher-than-expected medical costs have hurt the cooperative.
The announcement casts further doubt on the future of the cooperatives, small nonprofit insurers devised during the ACA's creation to inject competition in insurance markets. These co-ops immediately struggled to build their businesses. A dozen of the 23 created have already folded.
The news goes from bad to worse:
An Associated Press review of financial statements from 10 of the 11 surviving co-ops shows that they lost, on average, more than $21 million in the first nine months of this year. Those losses range from $3.9 million reported by Maryland's Evergreen Health Cooperative to $50.7 million booked by Land of Lincoln Mutual Health Insurance Co. in Illinois.
"Clearly the remaining health care co-ops are in dire circumstances," said Robert Laszewski, a health care consultant and former insurance executive who has been a frequent critic of the Affordable Care Act. "I don't know how any of them can survive another year."
And I don't see how Sarah Kliff who built a career on telling the public how wonderful Obamacare is can continue her cheerleader act which probably explains her utter silence on the subject the past few weeks.
