The United Health Group Inc. announced that it forecasted another $200 million more in terms of losses in 2016 from the individual insurance business lead by the United States President Barack Obama through his national health care reform law.
The losses come from the program's high medical costs. United Health Group Inc, which is considered to be the largest American health insurer, said that the problem was confined to Obamacare. According to reports, United Health is planning to exit in 2017.
United Health expected to lose $650 million on Obamacare this year and its other businesses which include pharmacy benefit management, consulting and technology are doing better than the program.
United Health is a company that also handles employer-based insurance as well as Medicare and Medicaid. Under Obamacare, plans were created to cement the health care problems of the country. Such as the Affordable Care Act. However, this act has pulled down United Health's margin down. "We believe ACA headwinds could be greater" for the company in 2016, said Susquehanna Financial Group analyst Chris Rigg.
The Patient Protection and Affordable Care Act (PPACA), also called the Affordable Care Act (ACA) or Obamacare, is a U.S. federal statute signed into law by United States President Barack Obama on March 23, 2010. The ACA was enacted to increase the quality and affordability of health insurance, lower the uninsured rate by expanding public and private insurance coverage, and reduce the costs of healthcare for individuals and the government. It was effective March 23, 2010 with major provisions phased in by January 2014. Additional and remaining provisions will be phased in by 2020.
However, recently United Health CEO Stephen Hemsley said that the company performed well enough in the second quarter to "fully absorb" $200 million in additional 2016 losses from "ACA-compliant individual products." In total, including last year's Obamacare performance, United Health has experienced more than $1 billion in Obamacare losses over the last two years.