The insurance companies offering policies through the Healthcare.gov exchange are continuing to lose money. The editors of the Wall Street Journal provide what I presume is the expected commentary:
While Aetna reduced its ObamaCare losses from what it had previously predicted, the business remained unprofitable in 2015 “and we continue to have serious concerns about the sustainability of the public exchanges,” said CEO Mark Bertolini in a call with analysts.
“Specifically, we remain concerned about the overall stability of the risk pool, including enforcement of standards related to special election period enrollment,” he added. The Department of Health and Human Services has made some helpful changes, “but more needs to be done.” He’s referring, among other things, to the fact that to goose enrollment in the exchanges HHS made it easy for customers to wait until they were sick to buy insurance. This stocks the risk pool with sicker people and disrupts normal insurance actuarial calculations.
In some markets it won’t take a lot of insurance company defections to create havoc. We’ll see what materializes.
There seem to be two conflicting schools of thought on the PPACA: that it was incredibly stupid or that it was fiendishly clever. Both can’t be right. Those who believe it was stupid look at a structure that appears to have been designed to fail and think of it as a mistake. Those who believe it was fiendishly clever look at a structure that appears to have been designed to fail and assume it’s strategic.