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Obamacare’s in Trouble as Insurers Tire of Losing Money

With almost $2 billion in losses this year, big insurance companies are pulling out of the health-care program.

Last November, when UnitedHealth Group said it expected to post big losses on its Obamacare policies in 2016, rivals such as Anthem and Aetna signaled their Affordable Care Act businesses were doing fine. The Obama administration used that as evidence to refute claims that systemic problems were brewing in its landmark insurance program.

Now, there’s no denying it. The four biggest U.S. health insurers admit they’re each losing hundreds of millions of dollars on their Obamacare plans. Rather than expand coverage, many are pulling out of the exchanges that were set up by the ACA so people can shop for insurance plans, often with the help of government subsidies.

UnitedHealth expects to lose $850 million on Obamacare in 2016, while Aetna, Anthem, and Humana are all on track to lose at least $300 million each on their ACA plans this year, according to company reports and estimates from Bloomberg Intelligence. UnitedHealth says it’s quitting 31 of the 34 states where it sells ACA policies. Humana is exiting 8 of 19 states and reducing its presence to just 156 counties, from 1,351 a year ago. Anthem hasn’t announced plans to change its participation in the program.

On Aug. 15, Aetna said it will stop selling Obamacare plans in 11 of the 15 states where it had participated in the program, reversing its plan to expand into five new state exchanges in 2017. “The exchanges are a mess as they exist today,” says Aetna Chief Executive Officer Mark Bertolini. “They’re losing a lot of money for a lot of people.”

Since its passage in 2010, Obamacare has brought insurance to some 20 million people who previously lacked it, pushing the uninsured rate in the U.S. to a record low. Yet as the law approaches its fourth full year of providing coverage, it’s beginning to show its limitations, particularly when it comes to fostering competition and lowering prices.

When the exchanges open for business on Nov. 1, many consumers will face fewer options and higher prices. On average, insurers are looking to raise premiums by about 24 percent in 2017, estimates Charles Gaba of, a website that...