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Obama-Care Kills A Health Insurance Co

This bit of news from the Richmond BizSense almost slipped by us:

Startup health insurer shutting

June 4, 2010 by Michael Schwartz

The hotly debated healthcare reform bill signed into law in March has killed a local insurance company.

At least that’s according to a brief letter Richmond-based nHealth sent to insurance agents explaining the reason behind the shuttering of the once promising local startup.

“I wanted to share with you the decision by nHealth’s board of directors to exit the health insurance market,” wrote James Slabaugh, executive vice president of the Richmond-based insurance company that employed about 50 people. (Many of those were at an office in Ohio).

The letter, obtained by BizSense, was sent June 2 to nHealth insurance agents…

The letter explained that “considerable uncertainties” in the health insurance market caused by the recent federal healthcare legislation made the two year-old company’s business model unsustainable.

“Despite a product that was gaining increasing acceptance among companies throughout the Commonwealth, the uncertainties in the regulatory climate coupled with new demands imposed by national healthcare reforms have made it challenging to sustain the level of sales required to remain viable over the long run,” Slabaugh said in the letter.

According to nHealth CEO Paul Kitchen and Paul Nezi, one of the company’s original investors and former board members, regulatory changes the company believes are coming as a result of the legislation will require levels of capital beyond what nHealth’s business model can sustain.

Nezi said nHealth tried to raise additional capital but was unsuccessful.

“People got skittish about writing any more checks,” Nezi said. “Because of that uncertainty, would you invest a few more million dollars of your money in a startup if you don’t know what the rules are going to be?”

That left company with only one choice.

“The most prudent and sensible conclusion for us is to discontinue the sale of healthcare policies and withdraw from the healthcare business,” Slabaugh wrote in the letter.

Founded in 2008, nHealth was built around a high deductible insurance plan model that utilized health savings accounts and kept costs down making consumers more involved in their healthcare decisions.

Nezi and other investors helped fund the company out of the gate with a $12 million investment, he said…

Kitchen said it’s unclear how much, if any, investors will get back.

This insurance company may have the honor of being the first victim of Obama-care.

But it certainly won’t be the last.

This article was posted by Steve on Wednesday, June 9th, 2010. Comments are currently closed.

7 Responses to “Obama-Care Kills A Health Insurance Co”

  1. P. Aaron says:

    50 jobs lost here, 75 jobs lost there, a 100 or so jobs lost over here, pretty soon we’re takin’ about real unemployment.

  2. proreason says:

    “Founded in 2008, nHealth was built around a high deductible insurance plan model that utilized health savings accounts and kept costs down making consumers more involved in their healthcare decisions”

    There business model was built around common-sense solutions instead of government contol.

    They are lucky it failed before the Moron got pissed.

  3. U NO HOO says:

    “if you don’t know what the rules are going to be?”

    Wasn’t that the problem with FDR’s administration?

    Companies hesitated to expand because they didn’t know what FDR was going to do next.

  4. Right of the People says:

    The boy king will soon replace FDR as our worst president. He’s already passed Jimah Carter and on his way to number one.

    At least FDR had a real crisis in the beginning unlike the boy wonder.

    • Mithrandir says:

      I am beginning to think he is about the same or WORSE than Jimmy Carter. At least Carter served his country, actually had AND ran a business (peanut farm in Georgia) and was a fairly humble man, although dumb as a box of hammers.

      Obama can’t even live up to Jimmy Carter’s good points.

      With Obama, it’s hard to figure out the truth:
      1. Is he just so unqualified to even run a McDonalds’ and is so arrogant, that he can’t even contemplate that what he is doing is wrong.
      2. He has intellectual smarts, but real-world stupidity.
      3. He is smart and is purposely trying to destroy America, and just make it LOOK like he isn’t.

    • proreason says:

      It’s not even close. We’re talking orders of magnitude, not incremental differences.

      We have had plenty of failures (Carter, LBJ), plenty of idiots (Carter, Pierce), plenty of clueless idealogues (Wilson, FDR), plenty of immoral people (Clinton, Nixon)…….but we have never, until now, had a president who has deliberately tried to destroy the country.

      And we have never had a person who hates the majority of the people he purports to lead.

      Future generations will be astonished when the truth is finally revealed about this guy’s backgrounds and motivations.

  5. Mithrandir says:

    Limbaugh is right BARAK THE DESTROYER.

    You can see it again on drudge, with BP losing billions in investments because they know Obama and the lawyer-state will punish BP with lawsuits.

    For history’s sake, I will include the link, read it, and if you still don’t think voting for lawyers is a bad idea, you need help man….http://www.telegraph.co.uk/news/worldnews/northamerica/usa/barackobama/7815713/Barack-Obamas-attacks-on-BP-hurting-British-pensioners.html

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