Insurance Companies Warn: Obamacare Marketplaces Financially Unsustainable

After six years of Obamacare, the American people are really starting to understand why the Democrats wanted to push the bill through Congress with little to no debate — it’s inefficient, overpriced, and unsustainable.

Republicans must feel some vindication when market forecasters and insurance companies are now coming out and confirming what they have been saying all along.  Last week, we covered The Daily Caller‘s report that eight out of the remaining 11 Obamacare insurance co-ops are likely to fail by year’s end.

This week, even more insurance companies and financial experts are coming forward to echo those concerns, as reported by The Hill:

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.

Many experts believe the exchanges are headed for a “death spiral,” and many others believe they are already in one.  This myriad of problems highlights the importance of the 2016 election.  Hillary Clinton has stated on many occasions that she hopes to keep the Obamacare system intact, and Bernie Sanders wants to give the government even more control of the healthcare system — either of which would ensure that the system becomes even more inefficient and expensive.

Source: The Hill