# UnitedHealth warns it may exit Obamacare plans **URL:** \ **Category:** Great Debates\ **Created:** [November 19, 2015, 8:37pm UTC](https://boards.straightdope.com/t/unitedhealth-warns-it-may-exit-obamacare-plans/738013 "2015-11-19T20:37:59Z")\ **Posts on this page:** 20\ **Page:** 6
**Author:** ![Fotheringay-Phipps](https://avatars.discourse-cdn.com/v4/letter/f/d9b06d/32.png) [@Fotheringay-Phipps](https://boards.straightdope.com/u/Fotheringay-Phipps)\ **Post date:** [December 10, 2015, 3:03pm UTC](https://boards.straightdope.com/t/unitedhealth-warns-it-may-exit-obamacare-plans/738013/101 "2015-12-10T15:03:32Z")
One other aspect I was not aware of: [Marco Rubio Quietly Undermines Affordable Care Act](http://www.nytimes.com/2015/12/10/us/politics/marco-rubio-obamacare-affordable-care-act.html?_r=1) > [@](#): > > A little-noticed health care provision that Senator Marco Rubio of Florida slipped into a giant spending law last year has tangled up the Obama administration, sent tremors through health insurance markets and rattled confidence in the durability of President Obama’s signature health law. > [@](#): > > The risk corridors were intended to help some insurance companies if they ended up with too many new sick people on their rolls and too little cash from premiums to cover their medical bills in the first three years under the health law. But because of Mr. Rubio’s efforts, the administration says it will pay only 13 percent of what insurance companies were expecting to receive this year. The payments were supposed to help insurers cope with the risks they assumed when they decided to participate in the law’s new insurance marketplaces. > [@](#): > > The hope was that payments into the program would be in balance with payments out, shielding taxpayers from responsibility. > [@](#): > > Then the numbers rolled in from the insurance exchanges’ first year of operation: Losses were so steep that insurance-company requests for risk corridor payments were $2.9 billion, compared with only $362 million paid into the program by profitable plans. > > Mr. Rubio says he “saved taxpayers $2.5 billion” — the difference between those two amounts — because his measure prevented the government from using other sources of money for the risk corridor payments. > > The administration has repeatedly told insurers that it will explore other funding sources to keep its commitment to companies losing money in the exchanges, but Mr. Rubio effectively tied the hands of federal health officials this year. More detail in the article, but I didn’t want to quote too much. The article is a bit cryptic in describing the exact details of what Rubio’s bill did. But what I gather from the above and the article is that the risk corridors were initially supposed to be revenue neutral and paid from funds collected from the insurers, claims above the corridor turned out to be much much higher than anticipated (due in part to a regulatory decision to allow (mostly healthier) people to keep lower cost plans) and Rubio’s bill blocked the Obama administration from making up the money from other sources. ---
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [December 10, 2015, 3:09pm UTC](https://boards.straightdope.com/t/unitedhealth-warns-it-may-exit-obamacare-plans/738013/102 "2015-12-10T15:09:06Z")
Assuming the insurers who participated were guaranteed these risk corridor payments, they’ll sue and get paid anyway. ---
**Author:** ![Fotheringay-Phipps](https://avatars.discourse-cdn.com/v4/letter/f/d9b06d/32.png) [@Fotheringay-Phipps](https://boards.straightdope.com/u/Fotheringay-Phipps)\ **Post date:** [December 10, 2015, 3:16pm UTC](https://boards.straightdope.com/t/unitedhealth-warns-it-may-exit-obamacare-plans/738013/103 "2015-12-10T15:16:30Z")
Considering that the entire point of the article was that the insurers were at risk of not receiving the payments, I would guess that this is not a good “assumption”. I mean, if you have any actual basis for believing what you’re suggesting is true, by all means trot it out. But just idly speculating that an article in the NYT quoting various important players who know the rules all just missed the boat does not strike me as meaningful. ---
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [December 10, 2015, 3:20pm UTC](https://boards.straightdope.com/t/unitedhealth-warns-it-may-exit-obamacare-plans/738013/104 "2015-12-10T15:20:14Z")
Sure. It’s called the contracts clause. What I don’t know is whether the risk corridor payments were contractually guaranteed. ---
**Author:** ![Fotheringay-Phipps](https://avatars.discourse-cdn.com/v4/letter/f/d9b06d/32.png) [@Fotheringay-Phipps](https://boards.straightdope.com/u/Fotheringay-Phipps)\ **Post date:** [December 10, 2015, 3:22pm UTC](https://boards.straightdope.com/t/unitedhealth-warns-it-may-exit-obamacare-plans/738013/105 "2015-12-10T15:22:54Z")
Exactly. IOW you’re just idly speculating based on nothing at all that maybe a lot of much more knowledgable people don’t know what they’re talking about. Not worth anything. ---
**Author:** ![Oredigger77](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/oredigger77/32/3181_2.png) [@Oredigger77](https://boards.straightdope.com/u/Oredigger77)\ **Post date:** [December 11, 2015, 4:55pm UTC](https://boards.straightdope.com/t/unitedhealth-warns-it-may-exit-obamacare-plans/738013/106 "2015-12-11T16:55:19Z")
> [@Fotheringay-Phipps](#): > > The article is a bit cryptic in describing the exact details of what Rubio’s bill did. But what I gather from the above and the article is that the risk corridors were initially supposed to be revenue neutral and paid from funds collected from the insurers, claims above the corridor turned out to be much much higher than anticipated (due in part to a regulatory decision to allow (mostly healthier) people to keep lower cost plans) and Rubio’s bill blocked the Obama administration from making up the money from other sources. Thanks for finding this. Our insurance co-op just went out of business since the government didn’t pay it the money it was expecting. If they had received the extra $10 million payment they were on track to pay back their start up loans early. I couldn’t find a one reporting on how the government was able to short pay their obligations like that. It’s funny that not paying that $10 million will end up costing the tax payer $110 million. I wonder how many other stories like that there are and once you account for them whether this actually was a savings. [https://cohealthop.org/health-cooperative-closure-press-release/](https://cohealthop.org/health-cooperative-closure-press-release/) ---
**Author:** ![Fotheringay-Phipps](https://avatars.discourse-cdn.com/v4/letter/f/d9b06d/32.png) [@Fotheringay-Phipps](https://boards.straightdope.com/u/Fotheringay-Phipps)\ **Post date:** [December 11, 2015, 5:14pm UTC](https://boards.straightdope.com/t/unitedhealth-warns-it-may-exit-obamacare-plans/738013/107 "2015-12-11T17:14:33Z")
> [@Oredigger77](#): > > Thanks for finding this. Our insurance co-op just went out of business since the government didn’t pay it the money it was expecting. If they had received the extra $10 million payment they were on track to pay back their start up loans early. I couldn’t find a one reporting on how the government was able to short pay their obligations like that. It’s funny that not paying that $10 million will end up costing the tax payer $110 million. I wonder how many other stories like that there are and once you account for them whether this actually was a savings. > > [PRESS RELEASE ABOUT CLOSURE OF YOUR CO-OP](https://cohealthop.org/health-cooperative-closure-press-release/) It’s hard to trust press releases from interested parties. According to a [more independent source](http://www.denverpost.com/business/ci_28979488/colorado-healthop-says-its-being-decertified-by-state), while the shortfall in risk-corrider payments may have been the nail in the coffin for that group, the bigger picture is that they were too aggressive on pricing in an effort to build market share, and thus lost money and had no cushion. > [@](#): > > HealthOP has been under state supervision since February, when the Division of Insurance identified the potential for claims to outpace the co-op’s ability to pay them, financial affairs chief Scott Lloyd said. > > The co-op’s aggressive strategy of slashing premiums resulted in a quintupling of its member base, which accounts for about 40 percent of policies sold on the health exchange and 2.5 percent of all insurance policies in Colorado. To help support the growth, HealthOP took on about $72 million in low-interest federal loans. > [@](#): > > At the end of 2014, HealthOP reported a net loss of $23 million and had about $24 million in reserves, putting the insurer at 700 percent of the risk-based capital requirement, according to the co-op’s annual financial report. That $24 million reserve included the anticipated CMS payments, Lloyd said. > > When the CMS money didn’t come through, HealthOP’s 2015 income projections were disallowed, resulting in the co-op landing in a hole, he said. Essentially they borrowed a lot of federal money to embark on a strategy that had no room for error, and blew it as a result. ---
**Author:** ![Oredigger77](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/oredigger77/32/3181_2.png) [@Oredigger77](https://boards.straightdope.com/u/Oredigger77)\ **Post date:** [December 11, 2015, 10:07pm UTC](https://boards.straightdope.com/t/unitedhealth-warns-it-may-exit-obamacare-plans/738013/108 "2015-12-11T22:07:34Z")
> [@Fotheringay-Phipps](#): > > It’s hard to trust press releases from interested parties. According to a [more independent source](http://www.denverpost.com/business/ci_28979488/colorado-healthop-says-its-being-decertified-by-state), while the shortfall in risk-corrider payments may have been the nail in the coffin for that group, the bigger picture is that they were too aggressive on pricing in an effort to build market share, and thus lost money and had no cushion.Essentially they borrowed a lot of federal money to embark on a strategy that had no room for error, and blew it as a result. I realize I grabbed a bias cite I was just looking for something quick. Even that article you cited shows that they should have had enough reserves to have another year of similar losses before they went out of business. That doesn’t seem like betting on a strategy with no room for error to me. Pick a strategy and being able to handle two years of failure seems reasonable for a start up. Even the state admitted that they would have certified them if they had received the federal funds promised. I would bet that they would pay back more of their loans with another year in business then they will going out of business at the end of the month. ---
**Author:** ![botsgotme](https://avatars.discourse-cdn.com/v4/letter/b/91b2a8/32.png) [@botsgotme](https://boards.straightdope.com/u/botsgotme)\ **Post date:** [December 14, 2015, 2:40pm UTC](https://boards.straightdope.com/t/unitedhealth-warns-it-may-exit-obamacare-plans/738013/109 "2015-12-14T14:40:03Z")
why don’t we just set a fixed price for all medical procedures…sorta like the Emperor Diocletian decreed? Example: doctor visit : $100.00, Heart transplant …$100.00. That will save on two things: -insurance premiums will go down -billing will be extremely easy Of course, few doctors will be willing to treat patients on such a fee schedule…but the important thing is; everybody will “have” insurance! that was the “goal” of the ACA!😃 ---
**Author:** ![Fotheringay-Phipps](https://avatars.discourse-cdn.com/v4/letter/f/d9b06d/32.png) [@Fotheringay-Phipps](https://boards.straightdope.com/u/Fotheringay-Phipps)\ **Post date:** [December 14, 2015, 5:41pm UTC](https://boards.straightdope.com/t/unitedhealth-warns-it-may-exit-obamacare-plans/738013/110 "2015-12-14T17:41:02Z")
> [@Oredigger77](#): > > I realize I grabbed a bias cite I was just looking for something quick. Even that article you cited shows that they should have had enough reserves to have another year of similar losses before they went out of business. That doesn’t seem like betting on a strategy with no room for error to me. Pick a strategy and being able to handle two years of failure seems reasonable for a start up. Even the state admitted that they would have certified them if they had received the federal funds promised. The nature of the insurance business is that you need to have enough to pay anticipated claims for current enrollees (with some margin) or the regulators shut you down. If you have little room for error on that score, then you have little room for error period. And it’s not like anyone figured out that they were going to be profitable in Year 2 or Year 3 or ever. They got funded by the government as part of a push to develop co-ops, as part of the ACA. I doubt if the government was handing out money for anyone who announced they wanted to start a co-op, so they must have had something going on, but it’s not like it was entirely backed by people with their own money at stake. > [@](#): > > I would bet that they would pay back more of their loans with another year in business then they will going out of business at the end of the month. No reason to think that. They probably would have lost even more money with another year in business, and their assets would have been even lower. ---
**Author:** ![lostinbago](https://avatars.discourse-cdn.com/v4/letter/l/9fc29f/32.png) [@lostinbago](https://boards.straightdope.com/u/lostinbago)\ **Post date:** [December 14, 2015, 8:21pm UTC](https://boards.straightdope.com/t/unitedhealth-warns-it-may-exit-obamacare-plans/738013/111 "2015-12-14T20:21:55Z")
Illinois pension plan only offered 3 companies and United was one of them. I chose United and have been well served. However their claims that they are losing money and need to increase premiums ring false. I also am an investor and their financial statements of profit shows they are doing well and would do even better if they were not paying chief officers tens of millions of dollars in executive salaries that could better be spent on enrollees health costs. ---
**Author:** ![Fotheringay-Phipps](https://avatars.discourse-cdn.com/v4/letter/f/d9b06d/32.png) [@Fotheringay-Phipps](https://boards.straightdope.com/u/Fotheringay-Phipps)\ **Post date:** [July 28, 2016, 1:55pm UTC](https://boards.straightdope.com/t/unitedhealth-warns-it-may-exit-obamacare-plans/738013/112 "2016-07-28T13:55:52Z")
[Anthem Projecting Losses on Affordable Care Act Plans This Year](http://www.wsj.com/articles/anthem-raises-outlook-reiterates-cigna-purchase-plans-1469617063) > [@](#): > > Anthem Inc. said it is now projecting losses on its Affordable Care Act plans this year, a turnaround for a major insurer that had maintained a relatively optimistic tone about that business. > > Anthem said it now believed it would see a “mid-single-digit” operating margin loss on its ACA plans in 2016, due to higher-than-expected medical costs. It expects better results next year, because it is seeking substantial premium increases. > > Anthem’s financial performance on ACA plans had previously been a relative bright spot among major insurers, many of which continue to struggle. The second-largest insurer’s worsening results on that business highlight continued instability in the marketplaces that are at the heart of the Obama administration’s signature health law. > > Anthem Chief Executive Joseph R. Swedish said that the insurer will re-examine its full-on commitment to selling plans on the health law’s exchanges. Anthem will take a “prudent” approach to its future offerings, he said. Also, some older news: [UnitedHealth Group to exit Obamacare exchanges in all but a ‘handful’ of states](https://www.washingtonpost.com/news/wonk/wp/2016/04/19/unitedhealth-group-to-exit-obamacare-exchanges-in-all-but-a-handful-of-states/) So a) it’s not just UHC as some maintained, and b) UHC wasn’t bluffing. ---
**Author:** ![Trom](https://avatars.discourse-cdn.com/v4/letter/t/958977/32.png) [@Trom](https://boards.straightdope.com/u/Trom)\ **Post date:** [July 28, 2016, 2:06pm UTC](https://boards.straightdope.com/t/unitedhealth-warns-it-may-exit-obamacare-plans/738013/113 "2016-07-28T14:06:08Z")
My insurance carrier is going bankrupt. > **[Insurer Land of Lincoln sues over unpaid Obamacare subsidies](https://www.chicagotribune.com/business/ct-land-of-lincoln-insurance-lawsuit-0624-biz-20160623-story.html)** > > Chicago nonprofit Land of Lincoln Health says it didn't get more than $70 million owed under an Affordable Care Act program meant to limit insurers' risk. Third year in a row my plan has disappeared. I assume this will be the third year in a row I’ll have to buy more expensive insurance with worse coverage. This is getting old. ---
**Author:** ![Fotheringay-Phipps](https://avatars.discourse-cdn.com/v4/letter/f/d9b06d/32.png) [@Fotheringay-Phipps](https://boards.straightdope.com/u/Fotheringay-Phipps)\ **Post date:** [July 28, 2016, 2:22pm UTC](https://boards.straightdope.com/t/unitedhealth-warns-it-may-exit-obamacare-plans/738013/114 "2016-07-28T14:22:04Z")
Insurance co-ops are a separate story. Most of those have failed already. This thread is about the exchanges, which are facing significant challenges but not nearly as bad as the co-ops. ---
**Author:** ![dreamregent](https://avatars.discourse-cdn.com/v4/letter/d/6f9a4e/32.png) [@dreamregent](https://boards.straightdope.com/u/dreamregent)\ **Post date:** [July 28, 2016, 2:23pm UTC](https://boards.straightdope.com/t/unitedhealth-warns-it-may-exit-obamacare-plans/738013/115 "2016-07-28T14:23:57Z")
> [@adaher](#): > > Nothing about the VA prevents veterans from paying for private health insurance. Ditto for Medicare. I’ve worked with the over-65 populations of these beneficiaries. In my experience, veterans who have a decent level of eligibility at the VA don’t want private insurance. If anything, they want more VA. Although they can, in fact, enroll on private plans and keep their VA eligibility at the same time, they simply don’t want anything to do with private insurance. In fact, they don’t want anything to do with Medicare either…they only want to go to the VA. In some places, there are Medicare Advantage plans (Part C) which give all or part of the Part B premium back to the beneficiary every month but VA beneficiaries think that is some kind of trick when it’s really not. Where those are offered, VA beneficiaries can get a really good deal if they look into them. Non-VA Medicare beneficiaries are a different animal. Medicare isn’t too bad by itself but you run the risk of unlimited out-of-pocket expenses if you have major health episodes… ~$1200 for each unrelated hospital admission, 20% of everything under Part B + other various out-of-pockets. It doesn’t seem so bad at first but, as one’s health gets worse, it can really add up. Hence, this population needs to make a cost-benefit analysis as well as weigh risk in deciding what type of insurance to get (either a supplement or Part C), assuming they can afford any extra expense at all. > [@Fotheringay-Phipps](#): > > [Anthem Projecting Losses on Affordable Care Act Plans This Year](http://www.wsj.com/articles/anthem-raises-outlook-reiterates-cigna-purchase-plans-1469617063)Also, some older news: [UnitedHealth Group to exit Obamacare exchanges in all but a ‘handful’ of states](https://www.washingtonpost.com/news/wonk/wp/2016/04/19/unitedhealth-group-to-exit-obamacare-exchanges-in-all-but-a-handful-of-states/) > > So a) it’s not just UHC as some maintained, and b) UHC wasn’t bluffing. This can be fixed by Congress and CMS if politicians can grow enough of a spine to stand up to the insurance lobby. Tell them they can’t sell anything unless they share the risk under Obamacare, and they will change their tune. Everybody knew Obamacare was going to have a very high loss ratio on the front end. That’s what happens when you have a population of people who haven’t been able to afford to go to the doctor for the last 20 or 30 years. ---
**Author:** ![Fotheringay-Phipps](https://avatars.discourse-cdn.com/v4/letter/f/d9b06d/32.png) [@Fotheringay-Phipps](https://boards.straightdope.com/u/Fotheringay-Phipps)\ **Post date:** [July 28, 2016, 2:31pm UTC](https://boards.straightdope.com/t/unitedhealth-warns-it-may-exit-obamacare-plans/738013/116 "2016-07-28T14:31:30Z")
> [@dreamregent](#): > > This can be fixed by Congress and CMS if politicians can grow enough of a spine to stand up to the insurance lobby. Tell them they can’t sell anything unless they share the risk under Obamacare, and they will change their tune. You’re expanding the thread in the direction of your preferred socialism. Eventually someone is going to have to pay for those losses, which amounts to an effective tax on the people. > [@](#): > > Everybody knew Obamacare was going to have a very high loss ratio on the front end. That’s what happens when you have a population of people who haven’t been able to afford to go to the doctor for the last 20 or 30 years. That’s just not true. If you have any evidence that “everyone knew” this, let’s see it. My recollection is that this was not at all expected. This claim seems like pure revisionism. Certainly the insurers who are pulling back on their exchange business didn’t know this. And if everyone knew it you would think they would have been among the first. And they’ve clearly made the assessment that it’s not just “the front end” either. Otherwise they wouldn’t be pulling back or contemplating it. ---
**Author:** ![dreamregent](https://avatars.discourse-cdn.com/v4/letter/d/6f9a4e/32.png) [@dreamregent](https://boards.straightdope.com/u/dreamregent)\ **Post date:** [July 28, 2016, 3:27pm UTC](https://boards.straightdope.com/t/unitedhealth-warns-it-may-exit-obamacare-plans/738013/117 "2016-07-28T15:27:19Z")
> [@Fotheringay-Phipps](#): > > You’re expanding the thread in the direction of your preferred socialism. Eventually someone is going to have to pay for those losses, which amounts to an effective tax on the people. People who aren’t familiar with the intricacies of insurance don’t realize it but the entire concept of insurance is a form of socialism…it is spreading risk across a pool of premium-payers. There is no fundamental difference between paying premiums to an insurance company or taxes to the government. In each case, one is paying into a risk pool and receiving a benefit when it’s needed. While I’m all for capitalism where it works, it just doesn’t work when it comes to healthcare. Every other industrialized nation has some form of socialized medicine for two primary reasons: it is cheaper because of the government’s buying power and it produces better outcomes. Collectively, we pay far more for our healthcare but not everyone is covered and our outcomes are worse. Here, our politicians don’t have the spine to stand up to the insurance lobby even in cases where it would seem to be easy. For example, Medicare funds the purchase of huge numbers of drugs but, is the government allowed to leverage it’s buying power to negotiate lower prices? Nope…because the politicians are beholden to the pharmaceutical industry and won’t allow it. > [@Fotheringay-Phipps](#): > > That’s just not true. If you have any evidence that “everyone knew” this, let’s see it. My recollection is that this was not at all expected. This claim seems like pure revisionism. > > Certainly the insurers who are pulling back on their exchange business didn’t know this. And if everyone knew it you would think they would have been among the first. What do you think the provisions about pre-existing conditions were all about? The reason these companies lost money is because they used faulty assumptions and miscalculated expected claims when setting their rates. > [@Fotheringay-Phipps](#): > > And they’ve clearly made the assessment that it’s not just “the front end” either. Otherwise they wouldn’t be pulling back or contemplating it. We’re still in the front end. These guys don’t want to play right now because it’s volatile and it’s hard for them estimate what the costs will be. When things settle down, they will want to jump back in. Personally, I’m not sure some kind of public-private monstrosity will work in the long run. I think we will eventually be forced into some sort of single payer system. Frankly, that is the only type of system that’s ever been truly effective anywhere. ---
**Author:** ![Fotheringay-Phipps](https://avatars.discourse-cdn.com/v4/letter/f/d9b06d/32.png) [@Fotheringay-Phipps](https://boards.straightdope.com/u/Fotheringay-Phipps)\ **Post date:** [July 28, 2016, 3:40pm UTC](https://boards.straightdope.com/t/unitedhealth-warns-it-may-exit-obamacare-plans/738013/118 "2016-07-28T15:40:25Z")
> [@dreamregent](#): > > People who aren’t familiar with the intricacies of insurance don’t realize it but the entire concept of insurance is a form of socialism…it is spreading risk across a pool of premium-payers. There is no fundamental difference between paying premiums to an insurance company or taxes to the government. In each case, one is paying into a risk pool and receiving a benefit when it’s needed. Not so. Risk prevention is a benefit to the one who is paying for it. Socialism is a (supposed) benefit for other people. What you’re advocating is socialism because forcing the carriers to offer these plans means that the losses for these plans will come out of the pockets of company shareholders or of people in non-exchange (mostly employer-sponsored) plans. None of these people get any benefits out of the exchange plans. > [@](#): > > What do you think the provisions about pre-existing conditions were all about? The pre-existing condition provision was intended to be offset by the individual mandate, and other risk-sharing provisions. Bottom line is that while there was a lot of unknown about exchange plan pricing, the notion that “_everybody knew Obamacare was going to have a very high loss ratio on the front end_” is revisionist nonsense. > [@](#): > > The reason these companies lost money is because they used faulty assumptions and miscalculated expected claims when setting their rates. Right. But the point is that these guys have billions of dollars at stake and as a consequence they have the best and the brightest working for them in setting these assumptions. And they couldn’t get it right. And now, there seems to be diminishing confidence that they can make money going forward. That puts the future of the exchanges in doubt. If the plans on the exchange end up being a few obscure plans with very narrow networks, that is not going to be anything close to what was envisioned. ---
**Author:** ![dreamregent](https://avatars.discourse-cdn.com/v4/letter/d/6f9a4e/32.png) [@dreamregent](https://boards.straightdope.com/u/dreamregent)\ **Post date:** [July 28, 2016, 4:34pm UTC](https://boards.straightdope.com/t/unitedhealth-warns-it-may-exit-obamacare-plans/738013/119 "2016-07-28T16:34:27Z")
> [@Fotheringay-Phipps](#): > > Not so. Risk prevention is a benefit to the one who is paying for it. Socialism is a (supposed) benefit for other people. > > What you’re advocating is socialism because forcing the carriers to offer these plans means that the losses for these plans will come out of the pockets of company shareholders or of people in non-exchange (mostly employer-sponsored) plans. None of these people get any benefits out of the exchange plans. For starters, insurance doesn’t prevent risk, it _ **transfers risk** _. Again, I’m not sure how familiar with the insurance industry you are but, as far as “forcing the carriers to offer” insurance goes, this does, in fact, happen routinely within the industry. Although, it’s usually done at the state level. For example, ever hear of _**[assigned risk](https://en.wikipedia.org/wiki/Assigned_risk#Motor_vehicle_insurance)**_ insurance? > [@Fotheringay-Phipps](#): > > The pre-existing condition provision was intended to be offset by the individual mandate, and other risk-sharing provisions. > > Bottom line is that while there was a lot of unknown about exchange plan pricing, the notion that “_everybody knew Obamacare was going to have a very high loss ratio on the front end_” is revisionist nonsense. See **[Financial Reporting Implications Under the Affordable Care Act](https://www.actuary.org/files/HPFRC_White_Paper_on_ACA_and_FR_final_062513.pdf)**, a white paper from the American Academy of Actuaries. Indeed, contingencies were made to mitigate the risk of higher claims. > [@Fotheringay-Phipps](#): > > Right. But the point is that these guys have billions of dollars at stake and as a consequence they have the best and the brightest working for them in setting these assumptions. And they couldn’t get it right. And now, there seems to be diminishing confidence that they can make money going forward. That puts the future of the exchanges in doubt. > > If the plans on the exchange end up being a few obscure plans with very narrow networks, that is not going to be anything close to what was envisioned. Insurance companies, particularly those that operate across large portions of the country, are structured in a way to play compartmentalized shell games with the money. They may lose money in one account vs another but they rarely go broke across the company. When UHC or Anthem says they lost some money, they are not necessarily telling us all the details. I’m skeptical they are having dire financial problems which cannot be addressed. Rather, I think they are skittish and simply don’t want to deal with it. ---
**Author:** ![Fotheringay-Phipps](https://avatars.discourse-cdn.com/v4/letter/f/d9b06d/32.png) [@Fotheringay-Phipps](https://boards.straightdope.com/u/Fotheringay-Phipps)\ **Post date:** [July 28, 2016, 4:49pm UTC](https://boards.straightdope.com/t/unitedhealth-warns-it-may-exit-obamacare-plans/738013/120 "2016-07-28T16:49:20Z")
> [@dreamregent](#): > > For starters, insurance doesn’t prevent risk, it _ **transfers risk** _. That’s the same thing. It minimizes risk for people who have insurance. > [@](#): > > Again, I’m not sure how familiar with the insurance industry you are I am an actuary, dealing primarily with health care. What about you? > [@](#): > > but, as far as “forcing the carriers to offer” insurance goes, this does, in fact, happen routinely within the industry. Although, it’s usually done at the state level. For example, ever hear of _**[assigned risk](https://en.wikipedia.org/wiki/Assigned_risk#Motor_vehicle_insurance)**_ insurance? What’s your point? > [@](#): > > See **[Financial Reporting Implications Under the Affordable Care Act](https://www.actuary.org/files/HPFRC_White_Paper_on_ACA_and_FR_final_062513.pdf)**, a white paper from the American Academy of Actuaries. Indeed, contingencies were made to mitigate the risk of higher claims. Does that mean that you’re retracting your claim, or do you not realize that you’ve just argued against yourself? > [@](#): > > Insurance companies, particularly those that operate across large portions of the country, are structured in a way to play compartmentalized shell games with the money. They may lose money in one account vs another but they rarely go broke across the company. When UHC or Anthem says they lost some money, they are not necessarily telling us all the details. I’m skeptical they are having dire financial problems which cannot be addressed. Rather, I think they are skittish and simply don’t want to deal with it. You have no basis for this assumption. It’s what you want to believe, and nothing more. But even if it were true, the implications of bigger insurance companies getting “skittish” and pulling back on their exchange business does not bode well for that platform. [Previous page](https://boards.straightdope.com/t/unitedhealth-warns-it-may-exit-obamacare-plans/738013.md?page=5) [Next page](https://boards.straightdope.com/t/unitedhealth-warns-it-may-exit-obamacare-plans/738013.md?page=7)