What the UnitedHealth Group leaving the state healthcare exchanges means for the ACA (aka Obamacare).
The idea of state and federal healthcare exchanges has always been a cornerstone to the Affordable Care Act (aka Obamacare). For the program to cover as many individuals as the ACA wants to do, the healthcare exchanges are vital. So last week, when UnitedHealth – one of the biggest health insurers in the US – said they were retracting from many of the ACA healthcare exchanges, many started to ask what does this mean for the ACA? Well… we’ve been getting a lot of questions about this recently and decided to answer the three biggest ones which will help people understand what all this exactly means.
1) With UnitedHealth getting out of the healthcare exchanges, does that mean “Obamacare is dead?”
Dead, no. Greatly affect some of the statewide healthcare exchanges in the US, absolutely!
Even though UnitedHealth is relatively a “small player” in terms of participating in the ACA healthcare exchanges – the Obama administration says it only covers about six percent of all enrollees – there are some states that would be affected greatly from UnitedHealth’s departure. States like Nevada, where UnitedHealth insures around 46% of individuals getting their insurance from the ACA, it will experience considerable disruption. That means next year, when UnitedHealth bows out of the healthcare exchanges, many of those insured in places like Nevada will have to change plans and shop once again for new carriers.
2) Will my premiums rise due to UnitedHealth no longer participating in the healthcare exchanges?
Most probably not. As analysts have predicted, even though the healthcare exchanges keep insurance rates low by having multiple insurance companies competing against each other to provide the lowest rates, UnitedHealth didn’t insure that many people through the exchanges. Also the health plans that UnitedHealth did provide in the exchanges tended to be one of the more expensive plans, so with their departure, the basic ecosystem which the exchanges have created shouldn’t change.
However, since many of the insurance companies in general are not making the biggest profits from participants in the ACA, insurance companies could make significant premium increases next year to make up for their losses. But once again, this would have happened any even if UnitedHealth didn’t leave the ACA marketplace. Also states have the power to accept or reject premium hikes if they were to happen.
3) What are the chances other health insurers follow UnitedHealth’s lead and leave the healthcare exchanges as well?
That right there is the big fear! It’s no secret that insurance companies have complained about the financial losses from the ACA healthcare exchanges. Major ACA insurance providers like Blue Cross Blue Shield have said that they may pull back some of their plans due to profit margins not being to their liking.
While the Obama administration and other supporters of the ACA are definitely underplaying the departure of UnitedHealth, in reality if their departure starts a trend of other insurance companies stepping away from the ACA marketplaces, then President Obama’s landmark healthcare law could be in serious trouble!
(Photo Credit: Pixabay.com)