Thursday, May 28, 2015

Headwinds for Health Insurers as Obamacare Stumbles

You might think this headline is a gag, given how deeply health insurers are dug into Obamacare. Only a month ago, I wrote that health plans’ mastery of Obamacare poses challenge to repeal. Losses in Obamacare’s controversial exchanges are not yet apparent in the publicly listed insurers’ financial statements.

However, exchanges comprise of a small (but not trivial) market of about 11 million people. Through 2016, health plans losing money in Obamacare can rely on taxpayers to help them out. After that, they are on their own.

Already, many plans are finding participation painful and increasing Obamacare premiums significantly for 2016, according to Louise Radnofsky of the Wall Street Journal,

Health insurers might not think the unravelling of Obamacare will hurt them too much. (Certainly, their investors do not). Nevertheless, these rate hikes increase the political risk of their participating in markets they do find profitable.

Read the entire article at Forbes.

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