Insurers Losing Money on Obamacare Plans: 'Something Has to Give'
Friday, 15 Apr 2016 11:06 AM
Health insurers say they are losing money on their Affordable Care Act rates, and some are considering dropping out of the program, according toThe Hill.
"Something has to give," said Larry Levitt, the Kaiser Family Foundation's Affordable Care Act expert, reports The Hill. "Either insurers will drop out or insurers will raise premiums."
In the near future, it appears that insurers will look to increase premiums. Blue Cross Blue Shield reported that new Obamacare enrollees had 22 percent higher health costs than people covered by their employers, said Levitt.
Insurers lost money in 41 states in individual markets, which include Obamacare marketplaces, according to a McKinsey & Company report.
"We continue to have serious concerns about the sustainability of the public exchanges," Aetna CEO Mark Bertolini said. Adding that "risk pool," the balance between sick and healthy people in a plan, was getting sicker and more costly.
UnitedHealth is the most well-known insurer that may be looking to exit the exchanges. It has already dropped Obamacare plans in Georgia and Arkansas. Blue Cross of North Carolina CEO Brad Wilson said it has lost $400 million due to Obamacare.
Writing for The Federalist, John Daniel Davidson called Obamacare a "slow-motion disaster."
Some experts are predicting that the market is still in flux, and not likely to hit a "death spiral," an industry term for market collapse.
One sign of success is the number of new signups, according to Mandy Cohen, COO of Centers for Medicaid and Medicare Services. She noted the 5 million new customers out of the 12.7 million signups.
Price increases are sure to trigger a Republican response to the Obama administration's act. "There's more political risk here than anything else," said Levitt, reports The Hill.
"Something has to give," said Larry Levitt, the Kaiser Family Foundation's Affordable Care Act expert, reports The Hill. "Either insurers will drop out or insurers will raise premiums."
Insurers lost money in 41 states in individual markets, which include Obamacare marketplaces, according to a McKinsey & Company report.
"We continue to have serious concerns about the sustainability of the public exchanges," Aetna CEO Mark Bertolini said. Adding that "risk pool," the balance between sick and healthy people in a plan, was getting sicker and more costly.
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UnitedHealth is the most well-known insurer that may be looking to exit the exchanges. It has already dropped Obamacare plans in Georgia and Arkansas. Blue Cross of North Carolina CEO Brad Wilson said it has lost $400 million due to Obamacare.
Some experts are predicting that the market is still in flux, and not likely to hit a "death spiral," an industry term for market collapse.
One sign of success is the number of new signups, according to Mandy Cohen, COO of Centers for Medicaid and Medicare Services. She noted the 5 million new customers out of the 12.7 million signups.
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