Before Trump Obamacare Exchanges Were In Big Trouble

Source: | Re-Post KSS Insurance 2/26/2017 – enrollment came in well below what was anticipated last month. After running very slightly ahead of last year’s numbers in December, January brought the news that about 400,000 fewer people had enrolled on the federal exchanges than did so in 2016. Those are scary numbers, not so much for the absolute size of the decline — it’s roughly 4 percent — but because any backwards movement is very bad news for the exchanges.

As many readers will recall, 2016 brought hefty premium hikes to make up for years of losses on the exchanges. Going into this year’s open enrollment period, there seemed to be a significant risk that we’d see what economists call “adverse selection”: People who were getting good value out of their insurance (because they used a lot of services) would keep paying the premiums, even if they grumbled a bit, but people who didn’t use a lot of health care would decide that at those prices, they might as well go uninsured. When those people exited the market, the average cost to cover each person remaining in the pool would be higher … and insurers still wouldn’t make money, forcing them to raise premiums again next year. This process is known as the “adverse selection death spiral.”

Read full article…

No Comments

Comments are closed.

Call Now Button