Largest US Health Insurer Exits California, Illinois Obamacare Markets

Tyler Durden's picture

Just over a month ago, we reported that in addition to Georgie, Arkansas, Michigan and Oklahoma, the largest US health insurer UnitedHealthcare announced it would also depart the following "Affordable" Care Act state exchanges: Connecticut, North Carolina; Nebraska, Pennsylvania and Texas. That, however, was just a preview of what's to come, because on April 19, UnitedHealthcare made its divorce with Obamacare complete when it announced plans to exit most of the Affordable Care Act state exchanges where it currently operates by 2017. And earlier today, United continued executing on this warning, when it first announced that it would stop offering Affordable Care Act plans in Illinois in 2017 followed promptly by news UnitedHealthcare was abandoning California at the end of the year as well.

As PBS reports, while United announced in April it was dropping out of all but a handful of 34 health insurance marketplaces it participated in, the company had not discussed its plans in California. UnitedHealth’s pullout also affects individual policies sold outside the Covered California exchange, which will remain in effect until the end of December.

“United is pulling out of California’s individual market including Covered California in 2017,” said Amy Palmer, a spokeswoman for the state exchange.


It’s expected that UnitedHealth will continue offering coverage to employers in California and to government workers and their families through the California Public Employees’ Retirement System.

Amy Palmer, a spokeswoman for the state exchange said UnitedHealthcare policyholders will know their options for 2017 coverage when health plans and rates for next year are announced in July. It is safe to say any "options" will not be cheap.

Concurrently, the company also announced it will stop offering Affordable Care Act plans in Illinois in 2017. According to the Tribune, the departure of the insurance company will reduce the number of coverage options for consumers in 27 counties. Like in California, Illinois members will have access to their benefits through the end of the year. The change does not affect the company's group insurance business or Medicare plans.

Furthermore, on Tuesday, UnitedHealthcare disclosed on a website dedicated to insurance brokers that it plans to offer on-exchange plans in only three states — Nevada, New York and Virginia. A company spokeswoman confirmed that it will withdraw from the Illinois exchange.

Critics of the Affordable Care Act have seized on the company’s exit, state by state, as further evidence the health-law insurance exchanges aren’t sustainable financially and that premiums will rise even higher for consumers.

The Obama administration has countered that the number of health plans offering exchange policies has increased since the 2014 launch, and that it expects the individual market will continue to stabilize as adjustments are made.

Unfortunately, as we showed recently, the critics so far have been spot on, and as the WSJ reported recently, health insurance premiums are set to skyrocket just in time for the election, creating a major hurdle for Hillary days ahead of the election.


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blown income's picture

Georgia .. 65% really!!!???


Fuck you Obama!

nmewn's picture
It’s expected that UnitedHealth will continue offering coverage to employers in California and to government workers and their families through the California Public Employees’ Retirement System.


And then, as if some great cosmic economic truth had finally been revealed, the communist dullards of the Faaarrreee! Shit Army turned and walked slowly back to sit under the shade tree trying to understand what it all means...for them ;-)

83_vf_1100_c's picture

 Boris, you are maybe thinking of wrong Georgia? Atlanta brothers ain't paying for healthcare.

Down to Earth Thinking's picture

Gotta wonder how much money has been and will be wasted on this sham ? fuckiing insane .

hedgeless_horseman's picture

Because the poor folk weren't paying their premiums.

new game's picture

and unhealthy mutha fuks...

healthy uninsured...

fucking joke-lol...

Cruel Aid's picture

I get berated by loved ones for those generally correct knee jerk reactions to the obvious.

Once you see the game plan, everything is clear as day and it all makes sense.

People dont want to know the truth, so they stay confused or offer lame excuses.

NurseRatched's picture

In Chicago, the poor people were too damn busy shooting (but not killing) each other to pay their premiums.

The insurance companies would save a bundle if they taught their exchange clients to shoot better.

Tijuana Donkey Show's picture

The irony is that the death rate dropped because hospitals are better at treating gunshot victims.The death rate would be much higher if people learned to aim before pulling the trigger.

Gankfest's picture

Won't be the last... -_-

Chupacabra-322's picture

Can you blame them? They're just practicing Free Market Principles & avoiding a Collective Fascist System.

Cabreado's picture

You're neglecting "the other side of the trade;" the so-called healthcare providers.

A cabal is a cabal; analysis of end-result is meaningless without consideration of all inputs and points of corruption and control.

Sorry to say... lame, ZH.

ebworthen's picture

Wait, I thought coverage was "mandatory"?  How can the corporatocracy turn tail?


Having the crap and paying for the increased premiums sure is mandatory.  What gives?


Don't tell me this is bailouts 2.0, fuck the citizenry, stroke the kleptoligarchy!?!? 


Free pussy and champagne for the elites?


I'm shocked I tell you!  Shocked!

Majestic12's picture

"I'm shocked I tell you!"

There is no such thing as "free champagne"...

ZD1's picture

Paying for increased premiums isn't mandatory under Obamacare, but having health insurance is mandatory under Obamacare.


You can always pay the Obamacare fine if you decide to not buy health insurance and you file taxes.


If you're income is below a certain threshold or you're a member of the FSA, then your health insurance premiums are subsidized by taxpayers.


It you make over the income threshold, then you are paying for your health insurance premiums--and a portion of everybody else's subsidized health insurance.


old_cynic's picture

Righto. If you're in the "over the income threshold" group, you're paying for your health insurance premiums including the huge rate hikes, which must keep increasing in order to cover the ever-expanding group of those who are "below the income threshold" (regardless of either group's actual ability to pay).


Harry Paranockus's picture

Now you know where your $2500 savings went. 

joego1's picture

Hey wait a minute here! So I have to participate in this fiasco but it's entirely voluntary for the insurance companies? WTF?

new game's picture

calling the suprem court, wak up, take that pillow off your head...

insanelysane's picture

Supreme Court doesn't care as they ruled the fine as a tax even though .gov says it is not a tax.

Cruel Aid's picture

Hey Boss, the plan the plan. Ah the o fantasy, well not o, his trainers.

But he gets soooo excited and wets a little.

Old Poor Richard's picture

Geebus, I thought the Fed could delay using helicopter money this completely predictable, I mean inevitable, outcome for longer than this.  The failed welfare state is imploding fast.

Majestic12's picture

"Largest US Health Insurer Exits California" if the Largest US Health Insurer Exits the Fucking Planet...then you have a story!

G-R-U-N-T's picture

Next up "Cadillac Tax 2018", then your benefits become taxable! By then 80% of one's income will go for healthcare, who needs food, shelter and a healthcare provider when your covered under Obamacare! 

BarkingCat's picture

That's right.  The asshole wrote the law so that the worse would hit after the nigger was out of office.

The spineless republicans should have defunded it.

I hape that Trump continues the precedent set by the big eared faggot - enforce only those laws which helikes. and completely shuts down Obama scare




just the tip's picture

while i agree with you in principle, imo, you are still falling into the two party paradigm.  let it go man.  it no longer exists.

the reason this legislation passed and is still in existence is because both sides of what passes for an aisle are funded from the same trough.  yes it was passed without a single vote from one side of the aisle.  but what is done is done.  and this is going to be with us forever.  it will not be defunded.  and if trump trys to unenforce any of it there will be a shitstorm in congress.  hell, paul ryan's main platform calls for the continuation of obamacare, uninterupted.

TradingIsLifeBrah's picture
TradingIsLifeBrah (not verified) May 31, 2016 9:01 PM

"This looks like a job for...The Government!!"

Bill of Rights's picture

The hypocrisy in  all this is their lobbyists helped  write this piece of trash waste of money bill...

ZD1's picture

MIT economist Jonathan Gruber was one of the key architects of Obamacare who admitted that Obamacare wouldn't have passed if voters had known that the law would work by forcing young and healthy people to provide massive new health insurance subsidies for the poor, old and sick.


Democrat Nancy Pelosi famously said that Congress has to pass the Obamacare bill first for you all to find out what's in it!

BarkingCat's picture

The young fuckers who are not enrolling are the ones who put this nigger in the white house and supported this shit bill.

Tgey still support his faggy flapping ass and this legislation.  They just don't want to pay for it. Fucking useless socialist leaches want others to pay for them.

new game's picture

passed it and now we are finding out that even the healthcare providers fucked up.

cant they fleece the plebs right the first tyme?

Nero_Hedge's picture

Read the actual report, United just entered the market in CA this year and only has 1200 enrolled under ACA, so hardly the death knell we're all waiting for..more like a bloody cough into a handkerchief

Seasmoke's picture

You have to like they stuck Obamas name on it, for the rest of history.

Bill of Rights's picture

Six years ago the true believers would have flamed this comment where are those cunts now?

Lanka's picture

It is Obama's signature legislation of his illustrious presidency.

krispkritter's picture

 " illustrious" -->  "illegitimate" FIFY

nmewn's picture

Ya gotta love how he then had the "Audacity of Hope" to come out and own it, proudly saying..."The Affordable Care Act -- also known as Obamacare...I actually like the name..." 


The Hindenberg was a great name too ;-)

Never One Roach's picture

"If you want to keep your health insurance, you can keep your health insurance. I promise!"


~ Another Soweto Obama Legacy



BTW, where's Barry's Democrat pals,"Botox" Pelosi and "Black-Eye" Reed, his co-authors of this Obamacare law?

JBilyj's picture

I am an insurance broker, opened up a renewal letter for one of my clients today, 30% increase...

Majestic12's picture

"I am an insurance broker,"

Really? What's your home address...a couple here are interested in quotes...

joego1's picture

I'm still trying to figure out how they spent $1 billion on a web site that didn't work. You can buy a decent company for that price.

Tom Servo's picture

I could have built them a website that didn't work for 750 million...


truthalwayswinsout's picture

I found out that standard billing on Government contracts for software engineers who are paid $40 per hour is north of $220 per hour.

Their basic site could have been done for $2000. The database for the site could have been done for around $15000. That is two software engineers and about 1 month of work. Data maintenance of the site for all the companies and users would have been about $40000 per month. Hardware to ensure access would have been about $500K.



SantaClaws's picture

Obama's Obamacare consultant Jonathan Gruber must be laughing hysterically.  Hope he chokes on his popcorn.

MedicalQuack's picture

What you really should be following with this company is the change of their business model as United is making more on pharmacy benefit managment than any of their insurance groups.  They are returning to their roots.

Before United Healthcare ever sold insurance, they were a Health IT company that created the very first pharmacy benefit management company in the late 70s that they sold to Glaxo.  They used that money to buy NY Met health insurance and a couple others and then became an insurance company.  Meanwhile back at Glaxo, about a year later they sold the pharmacy benefit management company to Express Scripts.  Is this not interesting as Ingenix was the United Subsidiary that did all the code and IT algorithms, so it's the same code everywhere just about.  Speaking of Ingenix, current CMS acting director, was pardoned from all the lawsuits incurred while he was the CEO of Ingenix and as a matter of fact, in the last couple of weeks, a judge gave the OK for the Cigna/Ingenix suit to proceed.  You see all the other big insurers, Health-Net, Cigna, Blue Cross, Humana, all "licensed" those cheating Ingenix algorithms.

Back on topic, California only let United in to a small market for Covered CA Obamacare policies and sold a total of 1200.  This is a small amount and when it mentions individual policies, both United and Aetna quit selling individual policies a couple years ago in California.  The company will hang on to all the employer insured and of course Medicare part D.  I live in the OC to where the company under the Optum name is buying up small doctor practices like crazy and you now see the name "Optum Care Clinic" on the office door along with their names.  Pharmacy Benefit management with gettin in cahoots with big pharma, represents a lot of money too.  Don't be too surprised if you see this company get in the middle of the Anthem and Cigna merger, why?  OptumRX has all the Cigna pharmacy benefit management business from Cigna, which was from the acquisition of Catamaran PBM.  Also last year United/Optum RX bought Helios workman's comp PBM.  The US Post Office is their largest client.  

Coulihan, the CEO of Healthcare.Gov, a former Cigna executive has already been touting Cigna as a a good replacement for the United ACA Obamacare policies, what a surprise.  Everything is rigged as HHS and United Healthcare are and have been tied together for years, current CMS Andy Slavitt along with others worked on that for years.  Long and short, United wants to be the single pay contractor for insurance in the US.  When the state of Vermont almost had theirs, well Optum was right there asking for the contract, so take a hint.

It doesn't stop there as the Quants of United Healthcare have been very busy creating yet another model of insurance called Harken to compete against itself.  If this doesn't small of an Obamacare policy, tell me what does, except that it's not one.

To even further tell you how shareholders seem to be valued more than customers, look at where United links you for information on doctors, Healthgrades, the most flawed site on the internet, full of dead doctors, no sanctions listed and the site wants you to do surveys and validate with your phone number or email so they can get more behavioral data there and sell it.  Healthgrades is a click bait marketing site and myself and tons of doctors would love to see it off the web.

One more thing, if OptumRX is your pharmacy benefit manager, be sure and ask the pharmacy for the "cash" price versus your OptumRX price.  The pharmacist can't tell you unless you ask.  If you don't ask, you won't find out and many times the cash price of the drug is less than what a copay could be, especially on expensvie drugs.  They will pocket the difference from you.  This is called a claw back and OptumRX has been busted many times by pharmacists talking to news media folks reporting the story.

So yes, the Obamacare policies may not be making money but keep your eyes open for this too big to fail insurer with almost 400 subsidiaries that do everything from cheap hearing aids to low income housing as well to get behavioral information from the poor to sell.  I have around 8 years of reporting on what their subsidiaries do if you want to search my blog on all of this as it has occurred in plain site as folks are just not paying attention.  So looks like the company figured out there's more money with getting in bed with pharma in more ways than one versus selling health insurance.  


ThrownOffZHTwice's picture
ThrownOffZHTwice (not verified) May 31, 2016 10:32 PM

Until the penalty for not signing up is greater than the premiums for signing up, healthy people are not going to sign up, and the insurers will have to jack up premiums or lose money.

BouncingCat's picture

Let's see.  In Illinois last year an unsubsidized plan for a family was about $11,000 in premiums with in-network deductible/cap at $6,200 and out of network deductible/cap at $12,400.  With the reduced networks of the available plans in 2017, it's going to be difficult (distance, quality, waiting) to in-network services.  Likely out-of-network services are going to be used and there are no negotiated discounts for out-of-network providers.  That's $11,000 + $6,200+$12,400 = $29,600 in possible healthcare costs for a middle class family who have to buy their own insurance.

Sure, it's deductible from taxes (any amount over 7.5% of AGI), but that's a really big hit.  Probably 3 times more than it was 5 years ago.