The revolt against Obamacare continues.
If you think you have it hard as a consumer of health insurance, you should be frightened that your health insurer may have it worse.
The law originally seemed like a winner for the insurance giants. Who wouldn’t favor a law that guaranteed more people would be purchasing their product — under the threat of a fine if they didn’t? Unfortunately, money with strings attached isn’t the same as money alone, and Obamacare’s regulations are making it impossible for insurance companies to turn a profit.
Now, insurers are warning losses from ObamaCare are unsustainable.
Via The Hill:Insurers say they are losing money on their ObamaCare plans at a rapid rate, and some have begun to talk about dropping out of the marketplaces altogether. “Something has to give,” said Larry Levitt, an expert on the health law at the Kaiser Family Foundation. “Either insurers will drop out or insurers will raise premiums.”
These hardships are faced despite the fact that most Americans have already seen their premiums or deductibles rise.
A poll conducted by National Public Radio (NPR) in February found that 56% said they haven’t been helped or harmed by Obamacare, while 25% say it harmed them, and 15% said it helped them. For every Obamacare success story, there are nearly two counterexamples.
The Blue Cross Blue Shield Association released a widely publicized report last month that said new enrollees under ObamaCare had 22 percent higher medical costs than people who received coverage from employers.
And a report from McKinsey & Company found that in the individual market, which includes the ObamaCare marketplaces, insurers lost money in 41 states in 2014, and were only profitable in 9 states.
So the insurance companies are losing money, which will cause them to raise premiums, and this is after they’ve already risen about $5,000 (per family, on average) under Obama. By contrast, Obama promised that his healthcare plan would’ve saved the average family $2,500. So he was only off by a margin of 300%.
“We continue to have serious concerns about the sustainability of the public exchanges,” Mark Bertolini, the CEO of Aetna, said in February.
The Aetna CEO noted concerns about the “risk pool,” which refers to the balance of healthy and sick enrollees in a plan. The makeup of the ObamaCare risk pools has been sicker and costlier than insurers hoped.
The health insurance industry is now learning that the government’s perks aren’t always delivered as promised, and we’re all bearing the burden.
[Note: This post was authored by The Analytical Economist]