Last week, UnitedHealthcare (UHC), the country’s largest health insurance company, announced that it was considering leaving the health care exchanges set up under the Affordable Care Act (ACA). It claimed that it was losing money on the plans it offers in the exchange, so it might decide to give up this market.
The prospect of UHC leaving the exchanges naturally delighted foes of Obamacare. Many quickly celebrated this as the beginning of the end. If other insurers follow the lead of UHC, there may be no one left offering insurance in the exchanges. And if there are no exchanges, there is no Obamacare. People would no longer be guaranteed the option to buy an insurance policy without regard to their health.
Before we join the death of Obamacare celebration there are a few questions worth asking. First, is UHC really losing money in all of the exchanges in which it is participating? Remember each of these state exchanges are treated as separate pools, with rates set based on the costs for treating people in the state. If UHC is pulling out of all the exchanges does that mean it is losing money in every single state? Presumably that would be the case, since it’s hard to see why UHC would be leaving a market in which it is making money.
If UHC really is losing money in all the exchanges it has entered, that would really say a great deal about the competence of UHC’s management. The day after UHC’s announcement, Aetna, another major insurer, announced that it was happy with the performance of its plans in the exchanges and that it has no intention of leaving this market. If Aetna can apparently make a profit in most of the exchanges and UHC can’t make money in any of them, then it doesn’t sound like UHC is run by a very good team.
That should make UHC shareholders very angry. Stephan Hemsley, the CEO of UHC, took home $66 million last year. For that sort of pay, it would be reasonable to think that he would be able to figure out how to make a profit in at least one of the state exchanges. Zero for 50 would be a pathetic track record even if Mr. Hemsley were getting just 1 percent of his current pay, or $660,000 a year.
Of course there is another possibility. It may be the case that UHC actually is making money in most of the exchanges, just like its competitor Aetna. It may be claiming that it is losing money and threatening to leave the exchanges in the hope of getting more favorable regulation. Perhaps the threat of leaving the exchanges will persuade regulators to allow UHC to charge higher premiums. In that case, claiming to lose money could be a very sound business strategy.
Unless we can get access to the details of UHC books we may never know for sure whether the company is being run by incompetents or liars, but this situation does point to the value of one part of the original plan for the ACA that got left on the cutting room floor: the public option.
Suppose that there was a Medicare run plan available in each of the exchanges. If people were unable to find a plan they liked from a private insurer, or their insurer left the market, as UHC is now threatening to do, they would be able to buy into the Medicare program. This would ensure that everyone would have at least one good option in the exchanges.
The insurers obviously hate the idea of having to compete with Medicare. That’s why the public option got killed when the plan was being debated by Congress. But we should all see UHC’s threats as a wake-up call reminding us of why we needed a public option in the first place.
Of course we could do even better with a universal Medicare system, as Sen. Bernie Sanders has proposed in his campaign for the Democratic presidential nomination. It certainly would have made far more sense to extend a large and overwhelmingly successful program to the whole population than to jury-rig a system as was done with the ACA.
But if politics prevents us from extending the same sort of health insurance coverage to the rest of the population that we now give to those over age 65, we should at least be able to give people the option to buy into Medicare. After all, if the private insurers don’t want to provide insurance, why shouldn’t we let Medicare fill the gap?
Help us Prepare for Trump’s Day One
Trump is busy getting ready for Day One of his presidency – but so is Truthout.
Trump has made it no secret that he is planning a demolition-style attack on both specific communities and democracy as a whole, beginning on his first day in office. With over 25 executive orders and directives queued up for January 20, he’s promised to “launch the largest deportation program in American history,” roll back anti-discrimination protections for transgender students, and implement a “drill, drill, drill” approach to ramp up oil and gas extraction.
Organizations like Truthout are also being threatened by legislation like HR 9495, the “nonprofit killer bill” that would allow the Treasury Secretary to declare any nonprofit a “terrorist-supporting organization” and strip its tax-exempt status without due process. Progressive media like Truthout that has courageously focused on reporting on Israel’s genocide in Gaza are in the bill’s crosshairs.
As journalists, we have a responsibility to look at hard realities and communicate them to you. We hope that you, like us, can use this information to prepare for what’s to come.
And if you feel uncertain about what to do in the face of a second Trump administration, we invite you to be an indispensable part of Truthout’s preparations.
In addition to covering the widespread onslaught of draconian policy, we’re shoring up our resources for what might come next for progressive media: bad-faith lawsuits from far-right ghouls, legislation that seeks to strip us of our ability to receive tax-deductible donations, and further throttling of our reach on social media platforms owned by Trump’s sycophants.
We’re preparing right now for Trump’s Day One: building a brave coalition of movement media; reaching out to the activists, academics, and thinkers we trust to shine a light on the inner workings of authoritarianism; and planning to use journalism as a tool to equip movements to protect the people, lands, and principles most vulnerable to Trump’s destruction.
We urgently need your help to prepare. As you know, our December fundraiser is our most important of the year and will determine the scale of work we’ll be able to do in 2025. We’ve set two goals: to raise $136,000 in one-time donations and to add 1440 new monthly donors by midnight on December 31.
Today, we’re asking all of our readers to start a monthly donation or make a one-time donation – as a commitment to stand with us on day one of Trump’s presidency, and every day after that, as we produce journalism that combats authoritarianism, censorship, injustice, and misinformation. You’re an essential part of our future – please join the movement by making a tax-deductible donation today.
If you have the means to make a substantial gift, please dig deep during this critical time!
With gratitude and resolve,
Maya, Negin, Saima, and Ziggy