After expanding to do
 business on the Affordable
 Care Act’s exchanges last 
year, a Wisconsin-based 
health insurance company
 founded in 1892 has
 announced it will close 
its doors.
Assurant Inc. announced
 last week one of its
 subsidiaries, Assurant
Health, an insurance 
company, will either be 
sold or shuttered after 
losing tens of millions of 
dollars this year. The 
decision comes 18 
months after the
 implementation of the
 Affordable Care Act,
 and industry watchers 
argue Assurant Health’s 
end can be attributed to 
the new health care law.
“The health and employee
 benefits business 
segments possess 
differentiated capabilities 
in their respective markets,
 but we do not believe
 they can meet our return 
targets at the pace we 
require,” Alan Colberg, 
president of Assurant Inc.,
 said in a statement.
 “While this is a difficult 
decision, we believe they
 would be strong assets 
for new owners that are
 focused more exclusively
 on health care and 
employee benefits.”
In a letter to its
 shareholders, Assurant
 Health said it lost money 
because of a reduction in 
recoveries under
 Obamacare’s risk 
mitigation programs 
and increased claims 
on the health care law’s 2015 policies.
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“It’s significant,” Andrew Edelsberg, a vice president of the rating agency A.M. Best, told The Daily 
Signal of how the 
Affordable Care Act
 affected Assurant Health.
 “It’s impacted the industry.”
Before Obamacare’s 
implementation, Assurant 
Health would underwrite 
its customer’s policies, 
which gave the company
 a competitive edge. The
 process involves adjusting
 the cost of a consumer’s
 premium based on factors
 such as medical history
 and age.
The Affordable Care Act,
 though, prohibited medical 
underwriting, and 
advocates touted the law
 as easing access to 
health insurance for 
people with pre-existing 
conditions.
“With respect to the
 Affordable Care Act, 
the skill set that an 
insurer needs to thrive 
in the Obamacare 
exchange market is 
different than the skill 
sets needed to thrive
 prior to the Affordable
 Care Act or in markets 
outside the exchange,” 
Ed Haislmaier, health 
policy expert at The
 Heritage Foundation, 
told The Daily Signal.
 “Most of the insurers 
offering coverage in the
 exchanges are used to
 operating in the 
individual and employer
 group markets. However,
 the exchange coverage 
design is a lot closer to 
Medicaid managed care
 than to traditional 
employer group coverage.”
Obamacare was 
implemented in October
 2013, and during the
first open enrollment
 period, Assurant Health 
opted not to offer coverage 
through the law’s
 marketplaces. In
 November, though, the
 company announced it
 would sell plans on 
exchanges in 16 states
 during the second open
 enrollment period.
In addition to offering 
insurance on exchanges 
in more than a dozen
 states, Assurant Health 
also sold plans to 
individuals in 41 states
 and small businesses in 
34 states, insuring close
 to 1 million people.
“This is an opportunity for 
agents to reach markets 
and customer needs they 
may not have been able 
to in the past, so they 
can say ‘yes’ to more
 consumers with individual
major medical needs–
whether they are subsidy-
eligible or not,” Charles 
Steele, executive sales 
officer of Assurant Health, 
said at the time.
Despite the company’s 
efforts to reach more 
consumers, Assurant
 Health saw a $64 million
 loss in 2014. During the
 first three months of 2015, 
the company reported
 operating losses of
 $80 million to $90 million.
Edelsberg noted that in 
the months since the 
health care law’s
 implementation, Assurant
 Health had been attempting
 to “pivot” with the law. While
 they were able to tackle 
some hurdles associated
 with the law’s
 implementation, the 
company was less 
successful in mounting
 other obstacles.
“Overall, the changing
 regulatory landscape in
 the health industry was
 really too much for 
Assurant [Health] at this 
point,” he said.
Haislmaier, meanwhile, 
contends that the 
government’s intervention 
in the health insurance 
industry pushed companies
 out of the market.
“When the government
 standardizes any product, 
you’re going to end up with 
fewer producers,” Haislmaier
 said. “That’s because the 
effect of government
 standardization is to turn
 the product into commodity,
 which leaves little room for
 the supplier to show how
 its version is better than
 those of its competitors.”