UnitedHealth, nation's largest health insurer, ready to bail on ObamaCare

Who saw this coming? Oh right. Lots of us. The ObamaCare economic model is based on the idea that you can mandate generous benefits, limit prices and take away all discretion from insurers about who can be covered. How can an insurer possibly expect to make money under a model like that? According to Democrats, they'll make it on volume because the individual mandate forces everyone to buy whether they like it or not.

According to reality, it doesn't work that way at all, and now the nation's largest health insurer is signaling it's ready to bail on ObamaCare:

The nation's largest health insurance provider dealt a blow to the Affordable Care Act on Thursday. UnitedHealth Group warned it may stop offering coverage to individuals through public exchanges after taking a big hit to its bottom line. The insurer's withdrawal from the Obamacare exchanges would force some 540,000 Americans to find coverage from another provider. UnitedHealth (UNH) downgraded its earnings forecast, bemoaning low growth projections for Obamacare enrollment and blaming the federal health care law for giving individuals too much flexibility to change plans. People who purchase insurance through the public exchanges are typically heavy users of their plans, draining insurers' profits, analysts say.

In a sharp reversal of its previously optimistic projections, UnitedHealth suspended marketing of its Obamacare exchange plans for 2016 — which the company has already committed to offer — to limit its exposure to additional losses. “We see no data pointing to improvement" in the financial performance of public-exchange plans, UnitedHealth CEO Stephen Hemsley said on a conference call, though he added that "we remain hopeful" the market will recover.

This is more than just a political blow to ObamaCare. It's an administrative nightmare, as millions of individuals will be forced to scramble for new insurers. And don't think for a minute that the other insurers find the ObamaCare economic model any more palatable. They're all faced with the same fundamental problem described in the excerpt above. And while you'd think UnitedHealth's competitors would welcome the exit of the biggest player on the market, it hardly does them any good if they merely find themselves stuck with the same customers who were draining UnitedHealth's profits - and because of the law they have no choice but to treat their coverage in exactly the same way. Remember when it became clear that people couldn't keep their plans because they plans would disappear, and Obama claimed it wasn't his fault if insurers stopped offering the plans? Of course, it was his fault, because he's the one who signed the law that made it impossible for them to keep offering the old plans. Now we're seeing that it's even worse than that. ObamaCare doesn't just kill coverage options people liked. It's driving big insurers out of the market entirely, and it's doing the same for care providers who can't make money treating hordes of Medicaid patients, which are the vast majority of all those who've signed up for coverage under ObamaCare. Obama and his defenders claim the law is working because more people are covered. The problem, of course, is that the nature of the coverage sets up insurers, physicians and patients for disaster under an economic model that's completely irrational and unsustainable. It may be impossible to repeal ObamaCare as long as Obama remains in office, but it may collapse under the weight of its own irrationality - which would hurt a lot of people in the process, but it least it would demonstrate to the American people once and for all what happens when you let Democrats mess around in markets they know nothing about.

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