It already looks clear that many Obamacare insurance plans are going to raise their prices significantly.
Over the last few years, average premium increases in the ObamaCare markets have been lower than the increases for people who bought their own insurance in premiums before the Affordable Care Act. But several trends are coming together that suggest that pattern will break when plan premiums are announced in early November. Many plans may increase prices by 10 percent, or more.
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Insurers have begun to propose big premium increases for coverage next year under the 2010 health law, as some struggle to make money in a market where their costs have soared.
The companies also have detailed the challenges in their Affordable Care Act business in a round of earnings releases, the most recent of which came on Wednesday when Humana Inc. said it made a slim profit on individual plans in the first quarter, not including some administrative costs, but still expects a loss for the full year. The Louisville, Ky.-based insurer created a special reserve fund at the end of last year to account for some expected losses on its individual plans in 2016.
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In the face of losses in the Affordable Care Act marketplace, Blue Cross and Blue Shield of Illinois is looking for new ways to cut spending.
Starting June 1, the Chicago-based health insurer will no longer accept credit cards as a form of payment for members who buy their own health insurance on or off the Illinois marketplace. The company began notifying customers of the change last month. Blue Cross will still accept other forms of payment, including debit cards.
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UnitedHealthcare’s decision to not offer Affordable Care Act exchange plans next year in “at least 26 of the 34 states where it sold 2016 coverage” may soon be followed by similar announcements from other health care insurers.
At least that is one implication that can be drawn from the findings reported in a new paper analyzing the performance of insurers that offered exchange coverage in 2014.
The paper’s authors—Heritage Foundation senior research fellow Ed Haislmaier, Mercatus Center senior research fellow Brian Blase, and Galen Institute senior fellow Doug Badger—examined enrollment and financial data for the 289 Qualified Health Plans sold on the exchanges in 2014.
They found that, in the aggregate, insurers incurred substantial losses offering exchange coverage. Furthermore, the poor results were despite insurers receiving substantial subsidies—indeed, more than they originally expected—through the Affordable Care Act’s “reinsurance” program.
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When UnitedHealth, the nation’s largest health insurer, announced earlier this month that it would exit the Affordable Care Act exchange business in all but three states, the obvious question was, who’s next? After all, if the nation’s biggest health carrier can’t make the Obamacare exchanges profitable, who can? UnitedHealth announced it expects to lose $650 million on its ACA business in 2016, although its first-quarter earnings beat analyst expectations, thanks to the company’s highly profitable consulting and technology businesses.
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Expect insurers to seek significant premium increases under President Barack Obama’s health care law, in a wave of state-level requests rippling across the country ahead of the political conventions this summer.
Insurers say the law’s coverage has been a financial drain for many of them, and they’re setting the stage for 2017 hikes that in some cases could reach well into the double digits.
For example in Virginia, a state that reports early, nine insurers returning to the HealthCare.gov marketplace are seeking average premium increases that range from 9.4 percent to 37.1 percent.
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UnitedHealthcare’s decision to quit insurance exchanges in about 30 states next year has patient advocates concerned that fewer options could force consumers to pay more for coverage and have a smaller choice of network providers.
The company’s departure could be felt most acutely in several counties in Florida, Oklahoma, Kansas, North Carolina, Alabama and Tennessee that could be left with only one insurer, according to an analysis by the Kaiser Family Foundation. (KHN is an editorially independent program of the foundation.)
To sell policies next year on the health law’s exchanges, also called marketplaces, insurers must apply within the next few weeks and get state approval this summer.
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California legislators are attempting to clear the way for undocumented immigrants to buy health insurance through the state’s insurance exchange — potentially setting a national precedent.
The fusion of illegal immigration and the Affordable Care Act, two of the most highly charged elements on the periodic table of U.S. politics, could engender a combustible reaction, especially in an election year.
Immigrants living in the country illegally are excluded from the insurance-expanding provisions of ObamaCare. They are not eligible for Medicaid (called Medi-Cal in California), and they are not allowed to purchase a health plan from the federal marketplace or any of the state exchanges.
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A Crain’s investigation shows how Health Republic, the insurance company that was supposed to be about people, not profits, misled its customers and ran itself into the ground.
It’s been decades since a New York health insurer has cratered so dramatically. Providers told Crain’s they signed contracts to treat Health Republic members because they assumed the insurer had been fully vetted by the state. The Cuomo administration had even issued press releases in 2014 and 2015 crediting DFS’ oversight as evidence of the state’s role in keeping premiums affordable.
“We feel betrayed,” said Robert Glazer, chief executive of ENT and Allergy Associates, a large medical practice with 173 physicians. The only warning signs of trouble were early last year, when Health Republic delayed claim payments by three to four months.
“We have no idea if our doctors will be reimbursed,” said Glazer, whose practice is owed more than $650,000. Even if money is recovered, Oechsner said payments to providers “would likely be modest at best.”
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Health insurance companies are laying the groundwork for substantial increases in ObamaCare premiums, opening up a line of attack for Republicans in a presidential election year.
Many insurers have been losing money on the ObamaCare marketplaces, in part because they set their premiums too low when the plans started in 2014. The companies are now expected to seek substantial price increases.
“There are absolutely some carriers that are going to have to come in with some pretty significant price hikes to make up for the underpricing that they did before,” said Sabrina Corlette, a professor at Georgetown University’s Center on Health Insurance Reforms, while noting that the final picture remains unclear.
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