‘I Had Nothing to Do With That!’ Obama Dodges Blame For Skyrocketing Premiums

[icanthearyou 4,462]

4 minutes ago, MDM4AU said:

There was no guarantee not to lose money. Losing money is why many have dropped out.  One of the biggest players in the nation lost millions last year. They were simply big enough to absorb it. Others were not so lucky. 

Are you sure about that?

http://finance.yahoo.com/news/obamacare-insurers-tap-bailouts-205900211.html;_ylt=AwrBT8BbchJYj4EAfdpXNyoA;_ylu=X3oDMTEyNnIxc2wzBGNvbG8DYmYxBHBvcwM1BHZ0aWQDQjIzNzBfMQRzZWMDc3I-

[MDM4AU 330]

21 hours ago, icanthearyou said:

Which ones?

Why did this happen?

What drove "co-ops" out of the market?

What is the specific reason?

There are a few regs. that play a part. There are parts that are some of the simpler ones…

Whether you agree with them or not, guarantee issue (no waiting on pre-ex) and mandated benefits directly affect the premiums. Risk adjustment payments, taxes & fees…all are part of ACA and are part of the premium.

There are still people who have felt the penalty tax is cheaper than premiums + out-of-pocket costs until they need coverage. These people are still coming on with day-1 coverage before their first month’s premium has cleared their bank accounts. Once they get treated, they are still coming out ahead paying the penalty tax + scripts than they are for premiums + OOP costs and scripts. Many insurance companies are having a hard time with this volatility.

What was supposed to help create competition for the big boys entrenched in a market has done the exact opposite.

Risk Adjustment Has Reverse Robin Hood Effect – Washington Post

At an underwriter’s convention earlier this year, CMS told underwriters that complained about the risk adjustment “you should have raised your premiums more.” That is sourced from 2 different people I spoke to that were there. TIFWIW.

Problems aren’t just in Red or Purple states either:

The New York State Department of Financial Services issued an emergency regulation to address unequal impacts some small group insurers face under CMS' risk adjustment program.

Under the Affordable Care Act, the permanent risk adjustment program was intended to shift funds from insurers with low-cost enrollees to plans with high-cost enrollees. In New York, the department said the program instead had disparate effects on some of the state's insurers and sent a June 28 letter to HHS Secretary Sylvia Burwell concerning the issue.

The department said the risk adjustment program required some New York insurers to pay 30 percent of their premiums to other insurers. LINK

Only seven of the original 23 CO-OPs remain standing after the Centers for Medicare and Medicaid Services (CMS) was forced to punt on promised risk corridor payments, shelling out only 12 % of the funds the insurers were banking on to stem the losses brought by heavier regulation and a sicker market on the individual health insurance exchanges.

Many of the new smaller insurers like the CO-OPs took an additional bruising when the CMS revealed over the Summer it owes millions in risk adjustment payments. Both programs were designed to transfer money from more successful insurers to less successful insurers to stabilize the market.

I argued with one of the more liberal posters on here a while back (don’t recall whom) that the “reinsurance” wasn’t going to be able to cover all losses like it was being billed to do. I am currently being proven right.

Regarding the notion that carriers are guaranteed to not lose money:

Health insurers in the marketplaces created by the Affordable Care Act will be reimbursed this year only 13 percent of the money they are owed under a program designed to help cushion the burden of covering large numbers of people who need expensive medical treatment.

As for lowballing, that may have made sense the first year but, taking into consideration all the above information that makes no sense this far into the program.  As for rates and HHS, any increase over 9% (it’s either 10+% or over 10%) has to be “approved by HHS. If they don’t like your explanation they threaten to basically smear you in the media.  So most carriers would prefer to remain under that threshold rather than try to have to explain to people who truly have no idea of how insurance works (that’s irony there) why you need 10% if you don’t need it.

I really have my doubts as to whether or not there are enough “healthy people” not taking coverage somewhere to offset the previously “un-insurable” people or those that are just getting sicker or beginning to take more expensive drugs. ACA did nothing to curb costs of medical care, only regulate insurance companies. The ridiculousness of calling it the affordable care act is only lost on the dense or political proponents of the legislation. Medical care continues to rise, especially for Rx. ACA does NOTHING to change Rx utilization/spending. Just look at the EpiPen incident recently. Or the fact that we pay 10X for the same drug what someone in India might pay.

I hope this answers your questions. There are a lot of people in the US and on this board that would love to lay the blame for all the current ills (no pun intended) at the feet of INSURANCE COMPANIES and I don’t think it is completely warranted. There were some COOPs and non-profits out there that were getting into the markets to make a difference and not just be another “Bogey-Man Insurance Company” that aren’t able to due to the convoluted rules of ACA.