Pre-existing issue boosts insurer’s losses
By Roger Pitt
“President Obama’s landmark Affordable Care Act (ACA) was seemingly dealt a huge blow when the nation’s largest insurer by people covered, United Healthcare, announced it was leaving the state exchanges in all but a ‘handful’ of states,” got my attention last week when accessing my e-mail.
It demanded a column on the ACA, commonly called Obamacare, signed into law March 23, 2010. It passed the Constitutional challenge by a 5-4 vote of the Supreme Court June 28, 2012. The Court ruled that states could not be forced to participate.
Wisconsin opted to use the federal exchange instead of going the state route. It is one of 19 states not to extend Medicaid.
Healthcare and its related issues, often insurance, is a common topic along End Stool row. Many gained a temporary reprieve as Network agreed to insure ThedaCare patients to the end of this year instead of terminating June 30 as scheduled.
I am among those anxiously awaiting word on that resolution. Network is the supplemental for many on Medicare/Medicaid and for New London school and city employees.
Exchanges are the cornerstone of Obamacare, providing a marketplace for people who don’t have a job offering an insurance plan to cover themselves and their families.
Even though an acquaintance has some issues with Obamacare, “it is better than not having health insurance.”
The monthly premium of $510 was a higher cost option, because of pre-existing conditions. Of more concern is the $6,800 deductible for each person under the policy.
“You need to make an annual report on income and determine insurance coverage, anyway,” when asked about possibly not having the current United Healthcare option. “I’ll just have to find another insurance.”
Another End Stool visitor was assessed an $800 penalty by the IRS for not having health insurance, as required in the ACA. The assessment was one of the issues persons opposed to it cited during the deliberation on the lengthy (11,000 page) bill.
Nancy Pelosi, then speaker of the House, prophetically proclaimed, “We have to pass the bill so that you can find out what is in it.”
The full measure of the ACA, including taxes and costs, is to be felt in 2020.
The impact of United Health’s decision may not be significant, because as of March 31, it only insured about 750,000 of more than 12 million enrolled in ACA.
It expects to lose $650 million on exchange plans this year, in part because the health status of people who bought plans is worse than expected. It lost a reported $475 million in 2015.
The ACA enforces coverage of people with pre-existing conditions, that often were exempted by insurance companies because of unknown costs. Similar rules often were associated to mental illness coverage.
The company covers 795,000 people through the exchanges as of the end of March 2016, with a drop to about 650,000 by end of the year.
United Health is closely associated with AARP as supplemental insurance for those on Medicare. Its advantage program often provides the supplemental service at no cost.
AARP and United Health were supporters of the ACA and no lobby group has the influence of AARP because of its sheer numbers of potential voters.
United Health serves about 70 million individuals in the United States. In 2015, it reported operating income of $11 billion. Its agreement with AARP runs through 2020.
It said more than 10 million people are enrolled in its Medicare plans, and most are enrolled in the AARP branded plan. When writing about Medicare I have facetiously referred to AARP as the ‘old peoples’ insurance.
United Health’s recent decision does not affect its Medicare supplemental plans.