Lured by promises of tax subsidies (welfare) and a new influx of customers, United Healthcare decided to sign up for Obamacare.
Twas a "Yuge" Mistake, as the next president might call it.
From the Hill:
The CEO of UnitedHealthCare on Tuesday said he regretted the decision to enter the ObamaCare marketplace last year, which the company says has resulted in millions of dollars in losses.
"It was for us a bad decision," UnitedHealth CEO Stephen Hemsley said at an investors meeting in New York, according to Bloomberg Business.
UnitedHealth, the countrys largest insurer, announced last month that it would no longer advertise its ObamaCare plans over the next year and may pull out completely in 2016, a move that sent shockwaves across the healthcare sector.
Hemsleys remarks double down on his earlier warning that the ObamaCare exchanges remain weaker than expected after two years and that it will take far longer for insurers to profit from the millions of new enrollees.
The company had already eyed ObamaCares federal marketplace cautiously since it launched in 2013. UnitedHealth only began selling plans on the exchanges last year.
Now, UnitedHealth officials have said that move will result in a half-billion dollars in losses over two years.
Hemsley said it was smart to sit out of the exchanges for the first year, but that the company should have held out another year.
"In retrospect, we should have stayed out longer," he said, adding that he believes the marketplace will take more than one season or two to develop.
I could have told him this was a "Yuge" FUBAR. The company board should fire him."We did not believe it would form this slowly, be this porous, or become this severe," he said.