Humana will exit eight of the 19 individual health insurance markets where it has sold Obamacare plans this year, the insurer announced Thursday.
The company is still struggling to make a profit on the exchanges, according to its second quarter earnings guidance released Thursday. The company expects to offer individual plans in 156 counties across 11 states compared to the 1,351 counties in 19 states it has offered plans in the year, according to a release.
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House Speaker Paul Ryan says he has heard personally from actuaries for a major health insurer that Obamacare is “failing.” Speaking at a Wednesday breakfast for Ohio delegates to the Republican National Convention, Ryan said that actuaries for Blue Cross Blue Shield have told him the Affordable Care Act is going downhill faster than they expected.
“As I said in the beginning, this healthcare law is going to collapse under its own weight,” Ryan said. “I met with all these actuaries from Blue Cross Blue Shield a little while ago, and they said ‘Well, congressman, the law is failing two years ahead of schedule,'” he added. “Meaning, basically, they saw it coming, but they didn’t think it would be this bad so fast.”
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Only about one-third of health insurers came out ahead in their first year in the ObamaCare marketplace, according to a study by the Commonwealth Fund released Wednesday.
While insurers made nearly twice as much money from healthcare premiums in 2014, overall profits “diminished noticeably” because of higher payouts, according to the expansive new analysis on companies participating in the exchanges.
Overall, health insurers underestimated their total medical costs by about 5.7 percent in their first year.
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State and federal officials have negotiated a deal to delay a federal policy that threatened to destabilize health insurance rates at small businesses across Massachusetts.
Governor Charlie Baker’s administration said Tuesday that the agreement will postpone for one year a piece of the Affordable Care Act that requires a change in the way small businesses’ insurance rates are calculated. Massachusetts will have to phase out its current rules and switch to the federal formula by 2019.
The rules apply to businesses with 50 or fewer employees.
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Top insurer UnitedHealth Group said Tuesday its 2017 earnings will benefit as it mostly exits the ObamaCare exchanges, its worst-performing business line.
UnitedHealth reported second-quarter earnings of $1.96 per share, up 13% from a year earlier, handily beating analysts’ estimates of $1.89. Still, the company just slightly raised its full-year earnings outlook to $7.80-$7.95 a share from $7.75-$7.95, roughly in line with consensus estimates for $7.89.
The high end of its full-year 2016 earnings guidance held steady because worse-than-expected results in its ObamaCare individual market business called for a conservative outlook, management said in an earnings call.
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In 2013, one Affordable Care Act component taking effect — a medical device excise tax — imposed a new financial burden on American Laboratory Products Co.
The 2.3 percent tax on revenue took a bite out of the company’s bottom line, “no question about it,” said Sean Conley, president of the family-owned-and-operated Alpco. “This obviously has an impact on where our funds go and makes it a bit more challenging to continue to create new jobs.”
The controversial medical device tax was a focus of conversation Friday when U.S. Sen. Kelly Ayotte visited the company for a discussion and tour.
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Oregon’s nonprofit ObamaCare health insurance co-op is winding down operations due to financial problems, the second such announcement this week for the troubled co-op program.
The announcement is just the latest in a long string of failures of ObamaCare’s co-ops, non-profit health insurers set up to increase competition with established insurers. Before this week, just 10 of the original 23 co-ops remained functioning, and Republicans have seized on the problems.
Oregon’s Department of Consumer and Business Services announced Friday that it is taking over the insurer, known as Oregon’s Health CO-OP, and will liquidate the company.
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Last week, the Department of Health and Human Services (HHS) released the payment amounts that some insurers owe and some insurers will receive through the Affordable Care Act (ACA) risk adjustment program. As the law’s implementation moves forward, it is increasingly clear that the controversial risk adjustment program presents a fundamental trap, a sort of “damned if you do, damned if you don’t” scenario. To the degree that risk adjustment works, insurers individually lack the incentive to enroll the young and healthy people needed for the ACA’s complicated structure to survive. To the degree that risk adjustment doesn’t work, large arbitrary transfers between insurers occur that produce significant uncertainty in the market.
The risk adjustment program is budget neutral—within each state insurers with healthier enrollees pay the aggregate amount that insurers with less healthy enrollees receive—and is intended to make insurers more-or-less indifferent to the health status of their enrollees. The Obama administration appears to recognize the importance of risk adjustment for the ACA’s future as HHS recently convened a day-long conference and released a 130-page paper on the subject. This conference was partially motivated by the strong complaints, particularly by newer and smaller insurers, that the program unfairly benefits large, established insurers.
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Insurers helped cheerlead the creation of Obamacare, with plenty of encouragement – and pressure – from Democrats and the Obama administration. As long as the Affordable Care Act included an individual mandate that forced Americans to buy its product, insurers offered political cover for the government takeover of the individual-plan marketplaces. With the prospect of tens of millions of new customers forced into the market for comprehensive health-insurance plans, whether they needed that coverage or not, underwriters saw potential for a massive windfall of profits.
Six years later, those dreams have failed to materialize. Now some insurers want taxpayers to provide them the profits to which they feel entitled — not through superior products and services, but through lawsuits.
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The health care law President Obama signed six years ago was supposed to fix the individual insurance market with enlightened rules and regulations. Instead, ObamaCare is destroying this market. Just look at what’s happening to Blue Cross Blue Shield.
If any insurer could cope with ObamaCare, it should have been Blue Cross Blue Shield.
Blue Cross companies came into the ObamaCare exchanges with decades of experience writing individual policies. Most of them are non-profits, which gives them an automatic leg up on the competition. And their plans captured the largest share of the exchange markets across the country.
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