Robert King documents for Washington Examiner readers some disturbing news for those who support the Affordable Care Act.
The largest insurer in the U.S. expects to lose more money in Obamacare because enrollees were sicker this year than in previous years, a new development as other insurers plan to raise rates next year.
UnitedHealth said in an earnings call Tuesday that it has generated more losses from its Obamacare business in the second quarter of this year. It has lost about $200 million this quarter and expects to lose $600 million by the end of the year.
The company said the latest losses are because of the Obamacare population getting sicker over the past year.
“The reality is the severity of chronic conditions inside the population actually increased on a year-over-year basis,” said Daniel Schumacher, chief financial officer for United, on the earnings call. He said the prevalence of people with conditions such as hepatitis C, diabetes and HIV have increased from 2015, but he did not specify by how much.
Losing money in Obamacare’s exchanges is not new for UnitedHealth, which has said it plans to leave a majority of the 30-plus markets where it offers Obamacare plans next year.
The explanation is unique, though, as some experts believe the Obamacare enrollee population is becoming healthier.
When Obamacare was implemented in 2014, insurers generally “underestimated how costly this population was going to be,” said Katherine Hempstead, who covers health insurance issues for the Robert Wood Johnson Foundation. As a result, Obamacare insurers set prices too low, which resulted in higher claims costs, eating into any potential for profit.
A new study from the nonpartisan Commonwealth Fund found that a majority of Obamacare insurers lost money in 2014, the first year the exchanges operated.
