UnitedHealth Group, the country’s largest health insurer, might stop selling plans on state insurance exchanges, citing higher-than-expected costs.
This news would be mostly unremarkable except that those state exchanges are part of (the Affordable Care Act), and it doesn’t take much to get people hyperventilating about the imminent death of “Obamacare” and speculating about its ramifications for the 2016 presidential campaign.
Sorry to disappoint, but UnitedHealth’s decision — which is tentative — doesn’t mean much. The company covers less than 6 percent of the exchange population; if it does pull out, those people will be able to get other coverage.
The only way this would matter to the future of the exchanges would be if other insurers were to follow UnitedHealth’s lead. While that’s possible, it’s unlikely, because the three biggest players — Aetna, Anthem and Humana — depend on the exchanges for more of their business and have so far shown no signs that they want out.
None of this is to say that there aren’t improvements the government could make to help insurers navigate the exchanges. Congress anticipated that, in the early years, insurers would struggle to anticipate their medical costs, and that as a result they would set premiums too low and thus lose money — exactly the problem that UnitedHealth is now reporting. That’s why the law established a series of buffers against losses, which Congress could extend or expand.
The government could require that most people buy coverage only during the regular open-enrollment period. UnitedHealth said those who get insurance outside of that period tend to use more services, increasing its costs.
Finally, the government can and should do more to encourage the young and healthy to get insurance.
“Obamacare” still needs some work.