Obamacare futures continue to worsen in recent weeks. A couple of weeks ago, UnitedHealth Group chose to exit the majority of Obamacare exchanges because it expects roughly 2/3 billion in losses. Next, Aetna announced that it might break even this year, but called for Congressional fixes to ensure sustainability in the marketplace.
The immediate fix, however, will be another round of premium rate hikes — with some expecting to be more than 10%. However, timing may play a key in the November elections; the rate hikes will hit when Obamacare open enrollment begins on November 1, just days before the presidential and Congressional elections. If high premium rate hikes happen as expected, voters may express their resentment at the ballot box.
Some notes on the current state of insurers and exchanges:
**”Blue Cross and Blue Shield plans, which dominate many state exchanges, saw profits plummet by 75 percent between 2013 and 2015, according to an analysis by A.M. Best Co. A chief reason for the financial woes: “the intensity of losses in the exchange segment.””
**Health Care Service Corp., which operates Blue plans in five states, dropped out of New Mexico’s exchange for this year after regulators refused to approve rate hikes as big as the company sought. In Texas, Illinois and two other states where HCSC does business, medical costs for individual customers exceeded premiums by more than $1.3 billion last year.
**Just over half of the 23 nonprofit startups seeded with Obamacare loan dollars have collapsed after hemorrhaging red ink. The 11 surviving plans continue to struggle, with more than $400 million in combined losses last year.
**New York-based Oscar, the much ballyhooed, tech-savvy startup bankrolled with billions in venture capital dollars, is sputtering. Medical costs for Oscar’s individual customers in New York, where it has the most customers, outstripped premiums by nearly 50 percent last year, according to financial filings.
**Just 28 percent of HealthCare.gov customers for 2016 were between the ages of 18 and 34, significantly below the 35 percent threshold typically considered necessary for a balanced marketplace.
Health and Human Services has yet to put out fresh numbers on the amount of enrollees who have actually paid premiums. The enrollment numbers were already widely off the mark from the predicted CBO numbers calculated when Obamacare was passed. Though many think Obamacare is an issue that has expired with the American electorate, it is certain to become more important in the days leading up to election day in November.