Insurance markets are complicated. But the story of Obamacare's 2016 premium increase is actually pretty simple: Many health plans — even those with decades of experience selling insurance — underestimated how sick health law enrollees would be.
This meant that in 2014, many insurers spent more paying out medical bills than members paid in premiums. Premera Blue Cross Blue Shield of Alaska lost $9 million covering just under 8,000 Obamacare enrollees that year. In Colorado, Rocky Mountain HMO found medical bills to be about 36 percent higher than premiums.
Why Obamacare premiums are spiking in 2016 - VoxThere are other insurers who didn't have this problem, who priced correctly and turned a profit. But they're in the minority of those selling on the health law's new marketplaces.
"Many more insurers lost money than made money in 2014," says Larry Levitt, senior vice president for special initiatives at the Kaiser Family Foundation.
Why do you dislike VOX? They are the most fact driven site out there...
I dislike Vox as a source, but I found a couple of items interesting:
Only 8000 enrollees and managed to lose 9 milion. Ouch.
Why Obamacare premiums are spiking in 2016 - Vox
For Progressives, and Progressive's idea of facts, sure. Would we expect anything different from Ezra Klein, an OpEd contributor to WaPo, MSNBC, Bloomberg News and of course, the Editor-in-Chief at Vox?
Even in the OP article, Vox blames the insurance industry for getting their math wrong, and not the actual requirements of the PPACA, for the increase in costs due to the PPACA.
For Progressives, and Progressive's idea of facts, sure. Would we expect anything different from Ezra Klein, an OpEd contributor to WaPo, MSNBC, Bloomberg News and of course, the Editor-in-Chief at Vox?
Even in the OP article, Vox blames the insurance industry for getting their math wrong, and not the actual requirements of the PPACA, for the increase in costs due to the PPACA.
That is just it, right there.
ACA mandates the mechanisms of assigning risk to a given pool of insured, then goes to the next step of mandating Insurance Company spending on medical benefits vs. business model needs (i.e. profits.)
It is not that the Insurance Industry got the math wrong, it is that there were only so many ways to do that math and ultimately the models were all wrong based on expectations (namely other ACA deliverables that ended up not really delivered... like exchanges and numbers of those covered, and also paying for that coverage.)
Since we can show well that the exchanges are a disaster, we can also show the ACA mandated models cannot possibly be accurate enough to ensure the Health Insurance business model going forward.
That is just it, right there.
ACA mandates the mechanisms of assigning risk to a given pool of insured, then goes to the next step of mandating Insurance Company spending on medical benefits vs. business model needs (i.e. profits.)
It is not that the Insurance Industry got the math wrong, it is that there were only so many ways to do that math and ultimately the models were all wrong based on expectations (namely other ACA deliverables that ended up not really delivered... like exchanges and numbers of those covered, and also paying for that coverage.)
Since we can show well that the exchanges are a disaster, we can also show the ACA mandated models cannot possibly be accurate enough to ensure the Health Insurance business model going forward.
Do you really think the authors of the ACA cared? I don't. I don't think the long term viability of the health insurance industry was a concern.
Do you really think the authors of the ACA cared? I don't. I don't think the long term viability of the health insurance industry was a concern.
....and that is EXACTLY why they are spiking. Just because things don't line up with the capitalist narrative doesn't mean they aren't still true. Some are, some aren't. Vox calls things as they are, and as a socialist I have been upset by certain things they post. I don't smear them because of that. Vox is what news used to be.
For Progressives, and Progressive's idea of facts, sure. Would we expect anything different from Ezra Klein, an OpEd contributor to WaPo, MSNBC, Bloomberg News and of course, the Editor-in-Chief at Vox?
Even in the OP article, Vox blames the insurance industry for getting their math wrong, and not the actual requirements of the PPACA, for the increase in costs due to the PPACA.
Now the insurance companies are going broke, and everyone's surprised?
Get a grip. Only about a quarter of people covered in this country are actually commercially insured by a health insurance company. Even if you look at people considered to be "privately insured" less than half are actually fully insured by a health insurance company: for most of those people, their health insurer is their employer.
The breakdown of insureds in the U.S. last year was roughly:
- 97 million insured by an employer (not an insurance company, ignoring stop loss coverage)
- 62 million insured by Medicaid
- 57 million in employer-based coverage insured by an insurance company
- 42 million insured by Medicare
- 19 million individually insured by an insurance company on and off exchanges
- 6 million otherwise covered by the government (e.g., the VA)
Health insurers make their money through most of those: they service Medicare and Medicaid (sometimes taking risk), they provide administrative functions to self-insured employer accounts, and sometimes they even get around to selling insurance products. Everyone knows United's the biggest health insurer. Yet of the ~$98 billion they took in during the first three quarters of this year, $38 billion came from Medicare (single-payer!) and $22 billion came from Medicaid/CHIP (sort of single-payer!). "Only" $35 billion came from the combination of selling insurance and not selling insurance but rather just selling administrative functions to employers insuring their own workers (in other words, actually selling insurance in the market is a subset of that $35 billion).
If you think a health insurer losing money for a few years on the individual market book of business while the market stabilizes signals the end of the industry, you've got a lot to learn about what health insurers in the U.S. actually do.
In reality, the goal of the ACA is to increase the number of people shopping for fully insured health insurance and provide a market path out of the existing balkanized system. Exchanges are the mechanism for that, first for just the individually insured and those in fully insured small group coverage, then for the large employer group coverage starting in about a year. And if the Paul Ryans of the world have their way, ultimately Medicare and Medicaid will go into them as well (a handful of states have already put certain Medicaid populations into the exchanges in lieu of the "traditional" Medicaid expansion). They're the the only plausible future for a market-based health system. That doesn't mean they'll ultimately work, it just means that if they don't the only alternative is not in the market direction.
If Exchanges are for the purpose of eliminating the balkanized system that was, I'm sure it's really working well as more and more insurers exit them.
I'm not seeing any good coming from ObamaCare, and I'm only seeing bad news.
Don't get me wrong, I don't disagree with you that if markets don't work then we're going to single-payer--there won't be anything else left to try.
Yeah, I am sure that if this attempt at government control of the healthcare system fails, voters would just love to try even more government control.
What would it be that voters are reject? From what I've heard, it would be cost-sharing (i.e., deductibles), insurer competition (i.e., network management), and paying premiums.
These are the defining features of any market-based system. If it turns out you're right and that what everyone really wants is a network with every provider in it, no deductible, and no premium, then there's only way they're going to get that. I'd prefer to try and grow markets for a bit but if you're right and the voters are against me, I guess that will be that.
Of course I am right. If this actually does fail, and it may or may not, voters will not be looking to give government even more control of what the government had just finished ****ing up.
I've seen more conservatives make the single-payer argument in the last two years than I saw liberals do so in the ten years prior to that.
Possibility #1 is that this is a cynical, nihilistic strategy and those pushing it haven't thought two steps ahead. Drum up support against deductibles, networks, and markets until they fail. Then...go back to pushing for high deductible plans, managed competition (i.e, network management), and marketplaces?
Possibility #2 is that there's really a sea change happening here and the right is beginning to believe these criticisms.
It doesn't really matter which is true. The right is now beating the single-payer drum even harder than the left. If they're effective at killing markets, the alternative that they're setting up is becoming hard to avoid. Because they're, intentionally or not, building a bipartisan consensus for what's "better" than markets.
To the point that this is in the latest Bloomberg poll of Iowa Republicans:
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