From The Hill:
By Peter Sullivan – 04/15/16 06:00 AM EDT
Health insurance companies are amplifying their warnings about the financial sustainability of the ObamaCare marketplaces as they seek approval for premium increases next year.
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.”
While analysts expect the market to stabilize once premiums rise and more young, healthy people sign up, some observers have not ruled out the possibility of a collapse of the market, known in insurance parlance as a “death spiral.”
In the short term, there is a growing likelihood that insurers will push for substantial premium increases, creating a political problem for Democrats in an election year.
Insurers have been pounding the drum about problems with ObamaCare pricing.
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.
“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 clearest remedy for the losses is for insurers to raise premiums, perhaps by large amounts — something Republicans have long warned would happen under the healthcare law, known as the Affordable Care Act (ACA).
“The industry is clearly setting the stage for bigger premium increases in 2017,” said Levitt of the Kaiser Family Foundation.
Insurers will begin filing their proposed premium increases for 2017 soon. State regulators will review those proposals and then can either accept or reject them.
There’s more at the link, including noting the obvious, that if state regulators do not approve rate increases which enable the insurance companies to at least break even after years of losses, some insurers might choose to cut their losses and simply withdraw from the program.
I’ve said it many times before: the wholly misnamed Affordable Care Act was never meant to actually work, but simply intended to get something, anything, that would pass. Then, once the principle that the federal government is the ultimate guarantor of people’s health care costs was established, once Obaminablecare finally collapses, the Democrats — along with some RINOs — will say, “Well, look, we tried to make it work through the private sector, and we just couldn’t, so a single-payer plan is all that’s left.”1 The option of eliminating the notion that the government will see to it that you get health care won’t be considered again.
Everything that conservatives said would happen with the passage of the Affordable Care Act either has already come to pass or is clearly about to happen! It was simple: there was no way to add thirty or forty million people who could not afford health insurance to the health insurance rolls without drastically increasing costs for people who already had insurance, both through increased health insurance premiums and higher taxes. There was no way to add people who don’t work for a living to the insurance rolls without increasing the costs for people who do work.
Well, we already have a single-payer medical care system, the Department of Veterans’ Affairs Hospitals, where the scandal of grossly delayed appointments and treatments broke in early 2014, persisted into late 2015, and still exist today. The truth is that the problems haven’t been solved because they can’t be solved, not without a massive increase in spending. The VA systems’ use of delaying and stretching out appointments and treatment are common to all of the large single-payer countries, because it is a way to save money! Working under large but still limited budgets, VA Hospital administrators have to find ways to save money; they simply have no choice. That they have adopted — but tried to hide — the practices used in Canada and the United Kingdom is hardly a surprise.
Americans are used to good, prompt medical care; we are used to it because medical care was primarily delivered to those people who could pay for it. Throw in a bunch of people who cannot pay for it, and the system gets stressed, the system simply cannot deliver medical care with the same speed and quality.
- Bernie Sanders is campaigning specifically on that issue. ↩