Obamacare a Losing Bet for Health Insurers Three Years in a Row


 

Health insurers lost money on Obamacare plans in 2016 for the third straight year.

But they lost less than the $4.5 billion lost in 2015, and for 2017 they will get closer to break-even results, according to S&P Global Ratings.

Still, even though 2016 premiums rose an average of 25 percent for benchmark plans on which federal subsidies are based, most insurers will remain below their target profitability levels, and more premium increases can be expected for 2018, S&P Global Ratings said.

Senate Republicans released a budget resolution that is the first step in repealing the Affordable Care Act. Some 20 million people have gained coverage under the 2010 law, but Republicans and President-elect Donald Trump (R) argue that it has resulted in worse health coverage, with fewer choices of doctors and sharply increased annual deductibles and other cost-sharing requirements for enrollees.

Republican repeal plans are a wild card in forecasts for health plans sold on the ACA exchanges, which enrolled 12.7 million people for 2016. Repeal isn’t expected to take effect this year, but uncertainty about the future may result in weaker-than-expected 2017 results, the S&P Global Ratings report said.

But some plans are making changes to their ACA plans that could improve their margins. “You can really see a lot of continuous innovation and experimentation on the part of carriers,” Katherine Hempstead, a senior adviser with health-care philanthropy Robert Wood Johnson Foundation, told me.

“That’s kind of the untold story of the individual market,” she said.

Read the full story at https://www.bna.com/obamacares-individual-market-n73014449264/.

Stay on top of new developments in health law and regulation with a free trial to the Health Law Resource Center.

Learn more about Bloomberg Law and sign up for a free trial.