Insurers warn losses from ObamaCare are unsustainable

[AFTiger 282]

By Peter Sullivan - 04/15/16 06:00 AM EDT

Health insurance companies are amplifying their warnings about the financial sustainability of the ObamaCare marketplaces as they seek approval for premium increases next year.

Insurers say they are losing money on their ObamaCare plans at a rapid rate, and some have begun to talk about dropping out of the marketplaces altogether.

“Something has to give,” said Larry Levitt, an expert on the health law at the Kaiser Family Foundation. “Either insurers will drop out or insurers will raise premiums.”

While analysts expect the market to stabilize once premiums rise and more young, healthy people sign up, some observers have not ruled out the possibility of a collapse of the market, known in insurance parlance as a “death spiral.”

In the short term, there is a growing likelihood that insurers will push for substantial premium increases, creating a political problem for Democrats in an election year.

Insurers have been pounding the drum about problems with ObamaCare pricing.

The Blue Cross Blue Shield Association released a widely publicized report last month that said new enrollees under ObamaCare had 22 percent higher medical costs than people who received coverage from employers.

And a report from McKinsey & Company found that in the individual market, which includes the ObamaCare marketplaces, insurers lost money in 41 states in 2014, and were only profitable in 9 states.

“We continue to have serious concerns about the sustainability of the public exchanges,” Mark Bertolini, the CEO of Aetna, said in February.

The Aetna CEO noted concerns about the “risk pool,” which refers to the balance of healthy and sick enrollees in a plan. The makeup of the ObamaCare risk pools has been sicker and costlier than insurers hoped.

The clearest remedy for the losses is for insurers to raise premiums, perhaps by large amounts — something Republicans have long warned would happen under the healthcare law, known as the Affordable Care Act (ACA).

“The industry is clearly setting the stage for bigger premium increases in 2017,” said Levitt of the Kaiser Family Foundation.

Insurers will begin filing their proposed premium increases for 2017 soon. State regulators will review those proposals and then can either accept or reject them.

Michael Taggart, a consultant with S&P Dow Jones Indices, pointed to data from his firm showing per capita costs for insurers are spiking in the ObamaCare marketplaces.

“We made a significant change in the rules with the ACA, and we're still working through the process to see how that market stabilizes,” Taggart said at a panel on Wednesday. “Is [a death spiral] a possibility? Sure it's a possibility. I wouldn't attempt to put a probability on it, because I think there are a lot of things going on.”

One factor helping to prevent a death spiral is ObamaCare's tax credits, which cushion the impact of premium increases on consumers.

“What we're likely to see is more of a market correction than any kind of death spiral,” Levitt said. “There are enough people enrolled at this point that the market is sustainable. The premiums were just too low.”

Dr. Mandy Cohen, the chief operating officer of the Centers for Medicare and Medicaid Services (CMS), said in an interview that there is “absolutely not” a risk of a death spiral or collapse in the ObamaCare marketplaces.

While acknowledging that “companies are needing to adjust” to the new system, she pointed to the 12.7 million people who signed up this year, 5 million of whom were new customers, as a sign of success.

“What brings us the most confidence about the long term stability and health of the marketplace is its growth,” Cohen said.

Another risk, should regulators reject large premium increases, is that insurers could simply decide to cut their losses and drop off the exchanges altogether.

“Given that most carriers have experienced losses in the exchanges, often large losses, it only makes sense that most exchange insurers will request significant rate increases for 2017,” said Michael Adelberg, a former CMS official under President Obama and now a consultant at FaegreBD.

“Market exits are not out of the question if an insurer is looking at consecutive years of losses and regulators are unable to approve rates that get the insurer to break-even.”

The most prominent insurer eyeing the exits is UnitedHealth, which made waves in November by saying it was considering whether to leave ObamaCare in 2017 because of financial losses. The company last week announced that it is dropping its ObamaCare plans in Arkansas and Georgia, and more states could follow.

The Department of Health and Human Services argues that the attention on UnitedHealth is overblown, given that the insurer is actually a fairly small player in the marketplaces.

It’s more important to watch what happens with Blue Cross Blue Shield plans, which are the backbone of the ObamaCare marketplaces.

There have been some rumblings of discontent from Blue Cross plans. The plan in New Mexico already dropped off the marketplace there last year after it lost money and state regulators rejected a proposed 51.6 percent premium increase. Now, Blue Cross Blue Shield of North Carolina says that it might drop out of the marketplace because of its losses.

Blue Cross of North Carolina CEO Brad Wilson said in an interview that the company had lost $400 million due to its ObamaCare business.

“We're not alone, and I think that that also is evidence to suggest that there are systemic and fundamental challenges that we all need to have a civilized conversation about,” Wilson said.

He said a key factor in the decision on whether to stay in the market next year will be whether regulators approve whatever premium increase the company ends up proposing so as to try to make up for its losses.

Asked about the risk of a death spiral, Wilson said he is not worried about that happening “tomorrow,” but has concerns if the situation does not change over time.

“There’s not going to be something magical happen that will cause this to turn around,” Wilson said. He is pressing for changes like further tightening up extra sign up periods that insurers say people use to game the system and repealing the Health Insurance Tax, which could help lower premiums.

Cohen of the CMS said that her agency is in close touch with insurers and Blue Cross Blue Shield of North Carolina in particular. But she pushed back on talk of Blue Cross of North Carolina dropping out of the marketplace, stating flatly, “I have no concerns about them leaving the market.”

She referred to problems the company has had with its computer systems that have led to some people being enrolled in the wrong plan, along with other issues that have added to the company’s administrative costs.

http://thehill.com/p...e-unsustainable

[AURaptor 1,137]

No no no no no no no no!

Not possible! Hope & change!

[Auburn4life 24]

And these private insurers will be the blame for it and then we will have single payer shoved on us

[AURaptor 1,137]

And these private insurers will be the blame for it and then we will have single payer shoved on us

Exactly as planned.

[icanthearyou 4,468]

We simply cannot provide healthcare for the poor and chronically ill. It is just not possible. We must keep our healthcare system as it is for the good of.................................

We must keep our healthcare system operating at a level of cost below.......................................

Those who cannot afford medical insurance in our current system should suffer and die. No excuses, no exceptions. Healthcare is about profits, not health, not caring.

[AURaptor 1,137]

ICHY thinks doctors lives belong to the govt

[cooltigger21 0]

ICHY thinks doctors lives belong to the govt

Itchy is a funny dude. He bitches about corruption in government but yet supports more government involvement in everything.

[AURaptor 1,137]

It's called being a troll.

[TitanTiger 20,708]

What should happen to the uninsured if they can't afford coverage?

[AURaptor 1,137]

What should happen to the uninsured if they can't afford coverage?

Eat right, drink plenty of water, rest, and get in some cardio. Make good choices.

[TitanTiger 20,708]

What should happen to the uninsured if they can't afford coverage?

Eat right, drink plenty of water, rest, and get in some cardio. Make good choices.

And if they are just unlucky in the genetic lottery and all that stuff doesn't help?

[AURaptor 1,137]

What should happen to the uninsured if they can't afford coverage?

Eat right, drink plenty of water, rest, and get in some cardio. Make good choices.

And if they are just unlucky in the genetic lottery and all that stuff doesn't help?

The planet will continue to spin...

[TitanTiger 20,708]

What should happen to the uninsured if they can't afford coverage?

Eat right, drink plenty of water, rest, and get in some cardio. Make good choices.

And if they are just unlucky in the genetic lottery and all that stuff doesn't help?

The planet will continue to spin...

So...eff 'em. Tough luck?

[AURaptor 1,137]

So...eff 'em. Tough luck?

Hell yeah.

Titan - the thread topic is the predicted and inevitable collapse of the insurance companies exclusively because of the ACA.

Insurers have been pounding the drum about problems with ObamaCare pricing .

Personally, my rates have gone up nearly 100%, and I'm likely one of the lucky ones. Some have had it much much worse. Why ? This entire crisis is being manufactured , by Obama and the Dems. They are creating a problem so bad, it'll take complete govt control to " fix " it.

THEY led us down this path. Not the insurance companies. Not the GOP. Not anyone else but the Democrats.

[TitanTiger 20,708]

So...eff 'em. Tough luck?

Hell yeah.

Titan - the thread topic is the predicted and inevitable collapse of the insurance companies exclusively because of the ACA.

That was followed by a lot of snark and bitching about gov't control. So I wanted to know, if you don't like the ACA, and you obviously don't want single-payer to cover everyone, what should we do about people who aren't poor enough to qualify for Medicaid (another program you probably don't like) but can't afford health care coverage, what should we do? Just let them die?

Insurers have been pounding the drum about problems with ObamaCare pricing .

Personally, my rates have gone up nearly 100%, and I'm likely one of the lucky ones. Some have had it much much worse. Why ? This entire crisis is being manufactured , by Obama and the Dems. They are creating a problem so bad, it'll take complete govt control to " fix " it.

THEY led us down this path. Not the insurance companies. Not the GOP. Not anyone else but the Democrats.

The insurance rates were going up like crazy even before Obamacare and it covered even less people than it does now. It's not like the ACA came in and ruined what was an awesome and inexpensive system.

And the GOP is complicit in us being here too. They sat on their asses for years, even when they had control of the WH and both house of Congress and didn't do jack-s*** to get us on a better path, to get more people insured. They largely ignored the problem while spending a bazillion dollars on idiotic wars and blowing money elsewhere. My rates were going up by double digit percentages every year or so already.

You may not like the ACA. I don't think it was a great solution myself. But it attempted to do something about the problem, which is more than I can say for the GOP. They basically did nothing since they proposed a system not very different from Romneycare and the ACA back in the early 90s to fend off Hillary's proposals, then act like the ACA is from some foreign planet and they've never seen such a thing before.

[augolf1716 21,646]

Normally I would never post in this type thread and what your saying is all true but the government has no money except to keep printing it. How in the heck are we going to pay for single payer in a country of over 320 million. I'm old so I not as affected as some of the younger folks. Think what it may be like 20 years from now. If I was 25 I would be scared #$@^%$

[AURaptor 1,137]

Zero 'snarking and bitching ' about govt control. It's central to the discussion at hand.

June , 2008

" We may not get there immediately "

Then, just a year later, here's the tune he sings -

What are not legitimate concerns are those being put forward claiming a public option is somehow a Trojan horse for a single-payer system. I’ll be honest. There are countries where a single-payer system may be working. But I believe — and I’ve even taken some flak from members of my own party for this belief — that it is important for us to build on our traditions here in the United States. So, when you hear the naysayers claim that I’m trying to bring about government-run health care, know this – they are not telling the truth.

http://www.politico....6#ixzz45wwF3uaG

Add to the fact that we KNOW Johnathan Gruber flat out told us he lied, Obama lied, they ALL lied, because lying was the ONLY way they could get the ACA passed.

And yes, it IS like the ACA came in ruined the insurance companies. THAT IS EXACTLY WHAT IS HAPPENING ! BY DESIGN !

Rates were increasing, but only marginally. No where NEAR the vast expanse that's happening now. My god, the amount of revisionist history you're trying to pass along is ridiculous.

[TitanTiger 20,708]

Normally I would never post in this type thread and what your saying is all true but the government has no money except to keep printing it. How in the heck are we going to pay for single payer in a country of over 320 million. I'm old so I not as affected as some of the younger folks. Think what it may be like 20 years from now. If I was 25 I would be scared #$@^%$

I will give you the sales pitch for it. I don't claim to be an expert.

The idea is that taxes will increase to pay for it. Everyone's taxes will go up. But you will no longer have to purchase coverage on your own or through your employer. So for the vast majority, they will make that money paid in higher taxes back and then some. But, every place in the industrialized world that has a single-payer/"socialized" model like this pays a lot less per person for healthcare than we do now and it covers everyone so it will be a less expensive system overall and everyone will have coverage.

[AURaptor 1,137]

So for the vast majority, they will make that money paid in higher taxes back and then some.

100% pure bull****. It'll never happen that way. What you're describing is a pure fairy tale.

[augolf1716 21,646]

Normally I would never post in this type thread and what your saying is all true but the government has no money except to keep printing it. How in the heck are we going to pay for single payer in a country of over 320 million. I'm old so I not as affected as some of the younger folks. Think what it may be like 20 years from now. If I was 25 I would be scared #$@^%$

I will give you the sales pitch for it. I don't claim to be an expert.

The idea is that taxes will increase to pay for it. Everyone's taxes will go up. But you will no longer have to purchase coverage on your own or through your employer. So for the vast majority, they will make that money paid in higher taxes back and then some. But, every place in the industrialized world that has a single-payer/"socialized" model like this pays a lot less per person for healthcare than we do now and it covers everyone so it will be a less expensive system overall and everyone will have coverage.

Perfect world hope it works. Doubt it. Thanks for the reply tt

[TitanTiger 20,708]

Zero 'snarking and bitching ' about govt control. It's central to the discussion at hand.

As was my question. You don't like this - what do you propose we do? And what does that plan do for those who can't get coverage?

And yes, it IS like the ACA came in ruined the insurance companies. THAT IS EXACTLY WHAT IS HAPPENING ! BY DESIGN !

Rates were increasing, but only marginally. No where NEAR the vast expanse that's happening now. My god, the amount of revisionist history you're trying to pass along is ridiculous.

horse***t.

http://www.nytimes.com/2006/09/27/business/27insure.html

http://business.time.com/2009/09/16/health-insurance-premiums-up-131-in-last-ten-years/

http://www.politifact.com/truth-o-meter/statements/2011/jan/19/chris-van-hollen/rep-chris-van-hollen-says-insurance-premiums-doubl/

Maybe you were fortunate enough to have an employer that shielded you from the bulk of the increases, but the increases were big, every year for at least a decade before the ACA came about.

[AURaptor 1,137]

You can post anything you like but it's bull****. I know for a fact my rates were climbing only marginally, if at all. First year, they went up 50% , then they nearly doubled after that.

The BS you're pushing isn't worth my time.

[TitanTiger 20,708]

Normally I would never post in this type thread and what your saying is all true but the government has no money except to keep printing it. How in the heck are we going to pay for single payer in a country of over 320 million. I'm old so I not as affected as some of the younger folks. Think what it may be like 20 years from now. If I was 25 I would be scared #$@^%$

I will give you the sales pitch for it. I don't claim to be an expert.

The idea is that taxes will increase to pay for it. Everyone's taxes will go up. But you will no longer have to purchase coverage on your own or through your employer. So for the vast majority, they will make that money paid in higher taxes back and then some. But, every place in the industrialized world that has a single-payer/"socialized" model like this pays a lot less per person for healthcare than we do now and it covers everyone so it will be a less expensive system overall and everyone will have coverage.

Perfect world hope it works. Doubt it. Thanks for the reply tt

The reasoning is that in basically every country that has universal coverage via some single-payer mechanism, the cost of care per person is about half or less than what we spend right now per person. And they cover everyone while our system leaves millions uninsured.

http://www.pgpf.org/chart-archive/0006_health-care-oecd

Maybe it won't work. But there are hard numbers from decades of implementation around the world in Germany, Canada, Britain, Japan, Australia, etc. to suggest it's at least possible.

[AURaptor 1,137]

And you're trying to trip me up w/ the inane questions about what to do. It's not my problem. I'm not in the HC industry. All I know the ACA MUST be repealed, 100%, and then start over.

Portability is one thing I know is needed. But Insurance companies fought that. PSA's are another idea which needs to be expanded. But as for what to do ? No idea. Except stop taking MY money to pay for votes by giving others healthcare.

[TitanTiger 20,708]

You can post anything you like but it's bull****. I know for a fact my rates were climbing only marginally, if at all. First year, they went up 50% , then they nearly doubled after that.

The BS you're pushing isn't worth my time.

Your rates are not evidence. You're one person. Actual numbers across the board are.

I know that any time data contradicts your chosen narrative you fry a circuit and declare it to all be lies, but the rest of us don't operate that way.