Wednesday, January 20, 2016

The Train Wreck -- Another Update -- January 20, 2016; Surge In Healthcare Losses Force President To Eliminate Six More "Special Enrollment Period" Categories

This trainwreck is tracked over at "Doomsday: US Health Care." A reminder for newbies: "train wreck" as a synonym / euphemism for ObamaCare was coined by a prominent Democrat who championed the program. He later announced he would not run for re-election. Out of respect for his family, I won't repeat his name now.

CNN Money reports: UnitedHealth expects to lose nearly $1 billion on Obamacare. That's the CNN Money headline -- not my words -- UnitedHealth expects to lose $1 billion on ObamaCare.
UnitedHealth (UNH), which is weighing an exit from the Obamacare exchanges, reported it lost about $475 million on Obamacare-compliant plans in 2015 and expects to lose more than $500 million this year. 
The insurer, the parent company of United Healthcare, ended last year with about 500,000 enrollees in Obamacare exchange plans.
It expects that number to grow towards 800,000 during the 2016 open enrollment period, which ends January 31, 2016,, before dropping again as some members get jobs, stop paying premiums or find insurance elsewhere.
(Also in 2015, it had about 150,000 enrollees who signed up outside the exchanges for individual policies that are compliant with Obamacare.)
This story will get wide exposure and much more in-depth analysis. UnitedHealth is not unique; the other insurers will see the same problem. We've discussed ad nauseum the reasons for this; not going to go through it again.
UnitedHealth, which sat out the first year of Obamacare in 2014, said it is not looking to grow its exchange business. Instead, it has increased prices, eliminated marketing and commissions and withdrawn its top-tier products. In an effort to stem the losses, it is also working more closely with providers and enrollees to manage their illnesses and care.
UnitedHealth warned in November that it might pull out of the Obamacare exchanges altogether in 2017, citing higher-than-expected claims. In particular, it blamed the large number of members signing up outside the open enrollment period who were using a lot of medical services.
Some insurers argue that Americans are waiting until they get sick to sign up and then finding a way to qualify during the so-called special enrollment period, which is traditionally open to those who change jobs, get married or divorced or have a baby. The Obama administration has since said it would tighten the rules for joining Obamacare during this period.
Because of this, it was reported that President Obama stepped in and did what the health insurers asked: no more late enrollments. The story is at USA Today but is being widely reported.
Bowing to pressure from insurers, federal officials on Tuesday tightened the conditions under which people can sign up for plans on the exchange outside open enrollment.
The move by the Centers for Medicare and Medicaid Services comes after complaints by health insurers that it was too easy for people to wait until they were sick to sign up and to drop coverage after they got treatment.
Earlier Tuesday, UnitedHealth announced a 19% drop in profit and downgraded its earnings forecast citing concerns about its Obamacare enrollment and the flexibility people had to change insurance plans.
CMS announced it would eliminate six more "special enrollment period" categories, a month after dropping the one that allowed people to enroll late if they became surprised by the penalty they face for not having insurance at tax time. This year, special periods will not be allowed for people, including non-citizens who had errors in their premium tax credits and others who weren't aware of mistakes or eligibility.
"Six more special enrollment period categories..." --- incredible -- just how many special categories were there? What a trainwreck.

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