UnitedHealth CEO: Obamacare Losses Worsening, Not Sustainable Past 2016

The chief executive officer of the largest U.S. health insurance company on Thursday told investors that the company’s losses from Obamacare were worsening, showed no signs of improvement, and would be unsustainable beyond 2016.

UnitedHealth Group CEO Stephen J. Hemsley made the comments in a conference call after the insurer warned investors about $425 million in losses primarily due to its participation in Obamacare, even though the company previously expected that the exchanges would have a neutral effect on profits. He even expressed some regret about participating in the program in the first place.

Asked whether the company would be willing to tolerate losses beyond 2016, Hemsley was emphatic: “No. We cannot sustain these losses. We can’t really subsidize a marketplace that doesn’t appear at the moment to be sustaining itself.”

The news from UnitedHealth comes at a fragile time for Obamacare, as enrollment stalls in its third year and insurers have been forced to cut premiums and access to providers. Republican presidential candidates have continued to call for the repeal of the law heading into the presidential election year, and the Senate is gearing up to pass a partial repeal by the end of this year.

“In our view, in recent weeks, market performance expectations for exchange products have further declined,” Hemlsey said, pointing toward a combination of weak enrollment trends in the healthcare exchanges and more costs associated with covering disproportionately sicker enrollees. (Read more from “UnitedHealth CEO: Obamacare Losses Worsening, Not Sustainable Past 2016” HERE)

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