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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Even before President Obama leaves office, ObamaCare has begun unraveling.
The law was passed over the objections of a majority of Americans, it is still opposed by a majority of Americans — and their opposition has been vindicated. Last week, UnitedHealth Group announced that, after estimated losses of more than $1 billion for 2015 and 2016 under ObamaCare, the company was pulling out of most of its ill-fated exchanges. In fact, commercial insurers across the country are hemorrhaging money on ObamaCare at alarming rates.
The president promised these insurers taxpayer bailouts if they lost money, but Congress in its wisdom passed legislation barring the use of taxpayer dollars to prop up the insurers. Without the bailouts, commercial insurers are being forced to eat their losses — while more than half of the ObamaCare nonprofit insurance cooperatives created under the law failed.
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A potential shakeup in Arizona’s Affordable Care Act marketplaces is resurrecting President Barack Obama’s 2010 health-care law as a political issue in this year’s U.S. Senate race.
The developments mean customers will have fewer subsidized plans to pick from next year, and in some rural counties, they could have no options at all. UnitedHealthcare, the national insurance giant, on Tuesday signaled that it intends to abandon Arizona’s Affordable Care Act marketplace in 2017. Blue Cross Blue Shield of Arizona, the only other insurer to offer plans in all of Arizona’s 15 counties, also is considering pulling out of some areas.
Arizona voters could face a stark choice on the issue in November.
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The ACA significantly altered the rules governing the individual insurance market, and the general effect was to lower premiums for older and less healthy people and raise premiums for younger and healthier people. To induce younger and healthier people to enroll, the law contained the individual mandate and subsidies for both buyers and, for the first few years of the program, sellers of insurance in the form of premium stabilization programs.
This study analyzes data from HHS from 2014, the first year of the ACA’s implementation, and finds that insurers suffered significant losses despite eventually receiving much larger payments from the law’s reinsurance program (one of the premium stabilization programs) than they expected when setting their 2014 premiums. Given the same population and same utilization of services from that population, insurers would have had to price average premiums more than 25 percent higher to avoid losses in the absence of the reinsurance program.
While insurers’ performance varied significantly across carriers and states, the large overall losses in 2014 raise questions about the long-term stability of the changes made by the ACA, particularly after 2016 when the reinsurance and risk corridor programs end and premium revenue must be sufficient to cover expenses.
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It’s not surprising that UnitedHealthcare is high-tailing it out of Arizona’s health-insurance marketplace. The exchanges — a major part of the Affordable Care Act — are money losers. Not enough young, healthy people have signed up in Arizona and elsewhere to use the plans. Some rural counties in Arizona may have no options on the exchange, which could complicate things for those who are required to have insurance but don’t qualify for coverage through an employer.
The exchanges have never been viable options for healthy, working people. They are not affordable for those who are in the middle class and patients have to be careful to choose a plan that offers decent doctor choices.
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The Centers for Medicaid and Medicare Services on Monday announced a massive update to managed care in Medicaid and the Children’s Health Insurance Program. In doing so, it attempts to bring the program in line with the changes Medicaid has undergone over the last decade. The new rule is the agency’s guideline for modernizing the low-income health care program and strengthen its quality of care.
Medicaid managed care services are offered by risk-based managed care organizations, which contract with state Medicaid programs to offer care to enrollees. Essentially, they are the private insurer alternative to traditional fee-for-service Medicaid.
CMS hasn’t issued any new regulations to the program since 2002, but a lot has changed since then. Not only has the Medicaid program itself grown under the Affordable Care Act, but now about 80 percent of Medicaid enrollees are served through managed care delivery systems, according to CMS.
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