Two years in, there’s a lot we still don’t know about Obamacare. How many people will it end up insuring? What will the premiums look like? How much will the program cost?
Some of these questions won’t be answered satisfactorily for a while, if ever. Even the most basic data point, on how many people have gained coverage, comes from Gallup polls and is a little murky. The percentage of people saying they don’t have health insurance has fallen from about 17 as enrollment kicked off to about 12 now. The easing of the recession has presumably helped that.
Other answers, however, will come into focus in the next year or so. The most important being: What will the market for individual insurance look like once Obamacare is in full effect?
In 2011, analysts were speculating that Assurant Health might exit the insurance business, the Milwaukee Journal Sentinel reported last week. So the recent news that Assurant’s parent company was looking to “sell or shut down” the insurance carrier by year’s end was not a total surprise. The issue now is whether its demise holds larger lessons about Obamacare’s impact on insurance markets.
One analyst called Assurant, which reported operating losses of nearly $64 million in fiscal 2014 and $84 million in the first quarter of fiscal 2015, a “casualty” of the law. The Affordable Care Act “required health plans to cover a package of basic benefits and required health insurers to spend at least 80 cents of every premium dollar on medical care or quality initiatives,” the Journal-Sentinel reported. Simply put, the law made health insurance more like a regulated utility—with plan designs, benefits, and overhead costs strictly regulated.
Obamacare supporters generally argue that these regulatory changes eliminate the potential for customer confusion or the sale of “substandard” insurance products. But further Journal-Sentinel reporting underscores a complication of that approach: