ObamaCare: United Healthcare's surprise warning that it may scrap participation in federal health care exchanges is more than bad news for consumer choice. It's a broader sign of an unsustainable system.
The nation's largest health insurance provider surprised the markets Thursday by saying losses from its 550,000 individual ObamaCare exchange enrollments were sharply cutting its bottom line. That's notable because ObamaCare exchange participation only forms a small slice of the $105 billion company by market capitalization.
Yet it was enough to make the giant company and all the value it creates throughout its many operations suffer enough to trigger, as IBD market reporter Jed Graham wrote, "a surge of red ink."
The company forecast $425 million less revenue in the fourth quarter and cut its full-year 2015 earnings-per-share forecast to $6 from $6.25-$6.35.
Not surprisingly, its stock fell 5.6% by the close of trading Thursday, and other health care and hospital companies such as Aetna, Anthem, Tenet, Cigna, Humana and HCA took similar hits.
"We see no data pointing to improvement," UnitedHealth Group CEO Stephen Helmsley said on a conference call. Patients, he explained, were using their plans more than the company had anticipated and, worse still, were dropping coverage when they got well.Read the rest of this IBD editorial HERE.
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