One of the nation’s largest health insurance companies just delivered a big blow to the Obamacare exchange marketplace. UnitedHealth Group, which did business in 34 states last year, announced it is leaving the Obamacare bureaucracy.
The insurance company’s withdrawal is comprehensive. It is also leaving the Small Business Health Options Program (SHOP) in Washington State.
As the Washington Policy Center points out, UnitedHealth Group’s departure from SHOP leaves Washington State without a statewide insurance company, as Kaiser only operates in Southwest Washington. Via the Washington Policy Center:
“UnitedHealth is a national, multi-billion dollar company and the exchanges were only a small part of its overall business. However, the company’s reasoning is still valid – it makes no sense to continue a program that loses money. Interestingly enough, UnitedHealth is already starting to diversify out of the insurance industry. Over 40 percent of its revenue now comes from its Optum consulting and analytics unit.”
Simply put, the Obamacare exchanges do not make financial sense for UnitedHealth Group (or any other insurance company for that matter). The bureaucracy-heavy exchanges attract older and sicker individuals who are draining the health care budgets of insurance companies, the federal government, and states alike.
This scenario was predicted when Obamacare was jammed through by the Democrats on a party-line vote in 2010. The young and healthy consumers the exchanges need to subsidize their more expensive policy holders are more than willing pay the fine and go uninsured.
Simply put, that pattern is unsustainable. Insurance companies need “healthy people, who don’t use health care, to offset the sicker individuals who do need care.”
UnitedHealth Group’s decision is further proof of the colossal failure that is Obamacare.