- The Washington Times - Tuesday, April 18, 2017

UnitedHealth Group, one of the country’s major insurers, announced Tuesday that its profits rose in the first quarter, even as it retreated from the wobbly Obamacare market exchanges.

The Minnesota-based company said its employer-based plans grew and it added a combined 1 million customers in Medicaid and Medicare Advantage plans since the start of this year, offsetting the more than 750,000 customers it shed when it bailed out of Obamacare’s exchanges.

Earnings per share are up 31 percent over last year, beating forecasts, the company told investors.

“This simply shows that Obamacare’s insurance exchanges have a big negative drag on most insurers’ financial performance,” said Robert Laszewski, a health policy consultant in Virginia. “This is why the publicly traded companies have largely exited or are in the process of exiting.”

UnitedHealth shocked the health care sector when it announced last year that it was looking at a $800 million loss from its participation in the Affordable Care Act’s web-based markets, and would slash its participation in 2017 from 34 states to just three.

Major players such as Aetna and Humana have followed suit since then, saying they had to pull back from exchanges that attracted a sicker-than-expected customer base in its early annual recruiting rounds.

Sen. Lamar Alexander, Tennessee Republican, said Humana’s decision to fully withdraw from Obamacare left more than a dozen counties in his state without a participating insurer.

Republicans say that those kinds of problems are causing Obamacare to crumble of its own accord, and say it’s all the more reason why they need to redouble their efforts to repeal and replace it.

But the GOP efforts on Capitol Hill so far have fallen short amid the party’s ideological squabbles, leaving insurers fretting about the future.

Compounding those concerns is President Trump, who recently threatened to withhold critical “cost-sharing” payments to insurers who pay for low-income Obamacare customers’ out-of-pocket costs.

Mr. Trump said he wanted to use the payments as leverage to force Democrats to the negotiating table, though the effect was mostly to frighten insurers who are still invested in the program and need to decide by late June whether to stay.

Marilyn Tavenner, president and CEO of America’s Health Insurance Plans, a major lobbying group, told Seema Verma, administrator of the Centers for Medicare and Medicaid Services, in a personal meeting Tuesday that uncertainty around cost-sharing payments is still the industry’s most pressing concern.

Congressional Democratic leaders are demanding Republicans include money for the payments in a stopgap spending bill due by the end of next week, and have threatened a government shutdown showdown otherwise.

Senate Minority Leader Charles E. Schumer sounded optimistic Tuesday that he’ll be able to get the money included.

“We’re working hard to get it in the bill and we’re very hopeful. Negotiations seem to be going quite well,” the New York Democrat told reporters. “And I’m very hopeful that we can come to an agreement that everyone can be proud of. I’m not going to get into details, but we’re working hard to get that provision in.”

Mr. Laszewski said beyond the cost-sharing payments, insurers want to know if the administration will enforce the individual mandate requiring Americans to buy insurance or pay a tax. The mandate has proven to be a weak tool so far, but it remains Obamacare’s main prod for getting healthier people into the marketplace.

The Trump administration has pledged to uphold the law while it’s on the books, though it reversed plans to get tough on Americans this tax season by rejecting returns that don’t say whether filers held health insurance last year.

 

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