- The Washington Times - Monday, April 18, 2016

The nation’s largest insurer could punch a hole through the middle of Obamacare if it pulls out of the health care exchanges, leaving more than 1 million Americans in an unhealthy marketplace with only a single option for insurance.

UnitedHealth has already said it will cut participation in three states’ exchanges. If it also ends its involvement elsewhere, it would leave 11 percent of Obamacare enrollees with just one insurer and another 18 percent with just two choices, according to the nonpartisan Kaiser Family Foundation.

Having at least three insurers offering plans is considered a benchmark of healthy competition within the exchanges.

“The significance of United leaving the exchange market would vary substantially by state and could have a significant effect in some markets,” the Kaiser study said.

UnitedHealth hosts a call Tuesday to detail its first-quarter earnings, but it has already sent signals of discomfort with Obamacare, saying it lost money on exchange plans last year and hasn’t pursued new customers this year.

UnitedHealth offers plans on exchanges in 34 states but said recently that it will drop out of Arkansas and Michigan next year and partially withdraw in Georgia.

The company’s sour outlook is roiling the waters at a pivotal time for Mr. Obama, who wants to put his law on firmer footing before the next president takes office in nine months.

More than half of Obamacare’s nonprofit co-op plans have failed, raising questions about the extent of consumer choice on the portals.

“When it comes to competition on Obamacare’s exchanges, HHS looks a lot like Kevin Bacon screaming ‘All is well!’ in Animal House,” said Sen. Ben Sasse, Nebraska Republican, referring to the film character’s futile appeal to stampeding paradegoers. “This year, 36 percent of the nation’s counties only have one or two insurers to choose from, and reports like this give little reason to suggest the outlook will improve.”

UnitedHealth took a cautious approach to the exchanges, offering plans in just four states in 2014, 23 states in 2015 and 34 this year, according to Kaiser.

It is still a relatively small player in the marketplace, accounting for 6 percent of Obamacare customers overall.

Other major insurers have also taken losses but say they are ready to stick it out.

“Ideally, it would be better to have more competitors rather than fewer competitors in the marketplace, and I think it’s unfortunate if United is going to leave, but I don’t think these markets are collapsing,” said Timothy Jost, a law professor at Washington and Lee University in Virginia who closely tracks the health care debate.

The Health and Human Services Department said insurers will enter and exit the marketplace, but it has “full confidence” that the Affordable Care Act will thrive for years to come.

“The number of issuers per state has grown year over year,” HHS spokesman Benjamin Wakana said Monday. “With millions of Americans insured through the marketplaces, it’s clear that this is a growing business for insurers, and it’s a product consumers want and need. The marketplace should be judged by the choices it offers consumers, not the decisions of any one issuer.”

Kaiser said a complete exit by UnitedHealth could force some Obamacare enrollees to pay more, depending on how the company priced its plans in their markets.

Monthly premiums for the second-lowest-cost silver plan would be $25 to $100 higher for a 40-year-old in roughly 300 counties and more than $100 higher in 13 counties.

Nationwide, that popular plan would rise only about 1 percent if UnitedHealth pulled out completely.

“Since UnitedHealth often is not one of the lower cost plans, the effect nationally on premiums of an exit by the insurer would be modest,” Kaiser said.

Kaiser says premium increases would be most pronounced in Alabama, Arizona, Iowa, Nebraska and North Carolina, where United tends to offer lower prices than its competitors. For its study, Kaiser assumed that no other insurer would step in if UnitedHealth left a given market.

Insurers will be filing their 2017 rate requests with state regulators over the next few months, but the administration last week said Americans should “put little stock” in the initial figures.

Despite the hue and cry over double-digit rate hikes in 2016, the average customer who qualified for subsidies purchased exchange coverage for $106 per month, a 4 percent increase over 2015, HHS said.

“Averages based on proposed premium changes are not a reliable indicator of what typical consumers will actually pay,” the agency said, “because tax credits reduce the cost of coverage for the vast majority of people, shopping gives all consumers a chance to find the best deal, and public rate review can bring down proposed increases.”


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