Crain’s Chicago Business wrote a piece today about United Healthcare wisely choosing to exit the ACA (Obamacare) exchange (Healthcare gov). Unfortunately, Crain’s neglected to mention the real reasons that United Healthcare has chosen to do so, so I will clarify. This decision was made for two reasons. They are as follows:

Firstly, the temporary “Three Rs” provision under the ACA (Obamacare) ends in 2017. The “Three Rs” provision (among other things) forces more profitable health insurers to redistribute their wealth to less profitable health insurers. Why would United Healthcare (the largest health insurer in America) voluntarily agree to continue to participate in such a foolish and misguided Socialist wealth redistribution scheme? A cursory review of human history proves that all other similar schemes have failed, and failed miserably. For example, Assurant Health did not survive after only one year of exchange risk exposure resulting in $63.7 million in losses in 2014 and projected operating losses of $80 million to $90 million for the first quarter of 2015.

Secondly, Republicans get very few victories in Washington D.C. They did however get one victory during the last budget battle in the fall of 2014. That victory was the END of taxpayer bail outs to health insurers. This victory was the impetus behind the rapid demise of companies like Land of Lincoln Health, one of the 23 troubled health care ‘co-ops’ which ended 2014 with a $17.7 million loss and in the first 6 months of 2015 had claims that outpaced premiums by $26 million.

Since selling health insurance off the exchange (Healthcare.gov) is still a viable option for now, it would be incredibly foolish for any carrier to continue to provide health insurance on the exchange. United Healthcare has wisely chosen not to continue contributing to their own demise. Other insurers should follow suit.

Health Insurance Mentors
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