Saturday, May 07, 2016

The Obamacare Drama Continues to Play Out

obamacare-2Press Release:

You can bet that ACA insurers will seek payback.
WASHINGTON, DC, May 6 – Proponents of Obamacare are downplaying the announcement that United Healthcare, the largest insurance provider in the country, that it will significantly reduce its participation in Obamacare exchanges.  But it means individuals seeking coverage at the Affordable Care Act [ACA] exchanges will have fewer, more expensive choices.

United Healthcare’s CEO, Stephen J. Hemsley, told investors in a conference call that “we will be down to a handful of states that we will be actively participating in the exchanges.”  The company has repeatedly acknowledged that its losses as an ACA provider were just too great a financial burden.

Dan Weber, president of the Association of Mature American Citizens, said United’s decision is no surprise.  He cited expert observers who suggest that the company does not have “as much skin in the game” as do smaller insurers, but that its decision can have larger consequences.  Other providers might reduce their participation.

According to Edmund F. Haislmaier, Senior Research Fellow, Health Policy Studies at the Center for Health Policy Studies, says that insurer participation in Obamacare is already in decline.  “In 2016, there are 287 exchange-participating insurers, as compared to 307 in 2015. While the participation level in 2016 is greater than the 253 insurers that offered exchange coverage in 2014, the figures for all three years are still well below the 395 insurers that offered individual-market coverage in the 50 states and the District of Columbia in 2013.”

Haislmaier says he expects more insurers will exit Obamacare next year as their loss exposure continues to grow.

“As Obamacare expert Larry Levitt at the Kaiser Family Foundation said: ‘something has to give.’  So, we can expect a new round of Obamacare premium increases to be announced by ACA carriers in the fall—just in time for the final days of the presidential election campaign.  That’s bound to case a bright light on ACA doings at a politically precarious time,” noted Weber.

The AMAC chief said that the next round of premium hikes may significantly outpace past increases.
“This time around the insurers are hurting and will need to make up for losses with larger boosts in premiums.  In fact, proliferating insurer losses almost guarantee bigger spikes.  For example, Politico reported earlier this week that two big players in the state ACA exchanges, Blue Cross and Blue Shield, saw profits dwindle by 75% between 2013 and 2015.  The publication quoted the ratings agency, A.M. Best Co., as putting the chief reason for their losses on the “intensity of losses” as a result of their participation in the Obamacare exchanges.  You can bet that they will seek payback.”

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