HealthSpan Driving Final Nail in Obamacare Coffin?

On December 1, I wrote:

“This past year, the Patient Protection and Affordable Care Act, better known as Obamacare, has been taking hit after hit.

Most of the cooperatives established by Obamacare have already announced that they are closing shop. A number of other insurance companies have announced dropping certain plans. Most insurance carriers have announced double-digit premium increases for 2016. In some areas, those premium increases may exceed 50%. A growing number of doctors, medical groups and hospitals are no longer willing to treat some patients due to their health insurance, especially if they are using Medicaid.

No doubt Obamacare has been taking on water from all of its hits but is still managing to keep afloat. However, the latest announcement just issued by UnitedHealth Group, the nation’s largest insurer, may just be the fatal hit that could sink Obamacare for good.

With over 550,000 Obamacare exchange policies, the mega insurer just announced that they have been losing millions of dollars on exchange policies. They just reduced their fourth quarter earnings outlook by $425 million. Stephen Hemsley, CEO of UnitedHealth pointed to the huge earnings drop to lower than anticipated exchange enrollment, the failing of so many of the co-ops and a worsening experience with their own claims as the cause of their solemn projections.”

If UnitedHealth’s announcement wasn’t the final nail in Obamacare’s coffin, then perhaps the latest announcement from Cleveland based HealthSpan will be. Chuck Heald, spokesman for HealthSpan issued the following statement:

“HealthSpan will stop selling individual and small-group health plans on the ACA’s exchanges to focus more on Medicare and employer plans, Heald said. HealthSpan jacked up premium rates for 2016 individual and small-group plans anywhere from 9% to 32% to account for the sicker-than-expected exchange population. HealthSpan also had to pay more than $17 million into the ACA’s risk-adjustment program in 2014, which did not fit into its original forecast, and the insurer has estimated another $19 million in risk-adjustment payments to the government for 2015.”

HealthSpan is already taking action to reduce their losses by laying off some of their employees who service the 166,600 Obamacare clients. They can no longer afford losing half a billion dollars on exchange policies as announced in November.

Other reports are circulating that a number of health insurance providers are considering following UnitedHealth and HealthSpan in exiting Obamacare if they fail to break even by the second quarter of 2016.

Jeff Dunetz of The Lid, referring to the HealthSpan announcement made the following suggestion:

“Last week’s news is compounded by the already-evident cracks in the ACA system, including that almost half of the state-run Obamacare exchanges have already gone to sleep with the fishes.”

“Perhaps President Obama should put all of the ISIS terrorists on Obamacare, they will immediately surrender their weapons and their industry will go out of business.”

That could kill two birds with one shot.

I don’t know how many more nails it will take to finally seal Obamacare’s coffin, but it has to be getting pretty close to sealing its fate. Before lowering the coffin into the ground for good, Obama will either ask Congress for more money for Obamacare, which he won’t receive, or he’ll make another illegal executive action to keep his flagship legislation from being buried 6 feet under as well it should be.