Thursday, August 18, 2016

ObamaCare: Will the Last Insurer Leaving Turn Off the Lights?

What if there were no companies left to insure people in the ObamaCare exchanges?  Would ObamaCare just die on its own and go away? Well, that is starting to look like a real possibility.

In only 3 years, the number of private insurers operating in the exchanges has fallen by more than 27%, from 395 in 2013 to 287 in 2016.  How many of those remaining will back out this year before the enrollment period begins in the Fall is anyone's guess.  But, the nation's largest insurers, United Healthcare, Aetna, and Humana, have already indicated quitting operations in certain markets. In addition, of the 24 co-op insurance companies that the Obama Administration spent billions to set up, and that were supposed to provide competition in states that lacked adequate competition, only 5 may be left standing before this year's enrollment period begins.

One reason that insurers may start leaving more heavily, is the fact that the 3-year protections against insurance losses like reinsurance and the risk corridors have expired this year.  This leaves insurers fully exposed to losses resulting by having to carry an older and sicker enrollment base.  With those protections gone, the across the board rate increase requests are expected to be in the double digits.

If the state regulators don't approve these increases because they are seen as too high, some insurers will have no other choice but to back out of some or all of the exchanges they operate in.  And, the rate increases will only make insurance less affordable for the younger/healthier crowd that is much needed to reduce losses.  Thus, losses will again increase and even more insurers will be forced to leave.

Essentially, ObamaCare seems to be in a death spiral as it becomes more and more evident that any gains made in getting people insured may come to an end and may even be reversed.  If this continues, no insurers will be left in the very exchanges that were intended to make ObamaCare affordable.


New Report: Insurers Leaving Obamacare Exchanges in Droves:

The 8 [remaining] Obamacare Co-Ops Most Likely To Fail This Year:

After $300 Million Loss, Another Major Insurer Pulls Out of Obamacare:

As millions get covered, a POLITICO investigation finds that dozens of the insurers that the health care law depends on are losing money and even abandoning the system. Can it be fixed?:

Double-digit ObamaCare premium hikes projected in 2017:

California's Obamacare premium sticker shock:

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