Obamacare Premiums Climb, But Insurers Struggle for Profit

[eridani]

http://www.bloomberg.com/news/articles/2015-10-30/obamacare-premiums-jump-but-insurers-still-struggle-for-profit

Many people shopping for health coverage this weekend on the websites created by Obamacare are going to see double-digit percentage increases in their premiums. That’s still not enough for some insurers.

Anthem Inc. says there remain competitors in the government-run marketplace offering premiums that aren’t enough to profitably provide the coverage patients will require. Prices in some areas probably will have to climb in 2017 and even 2018 to reach levels that make sense, according to Chief Financial

Officer Wayne Deveydt. Meantime, Anthem will sacrifice market share to keep its plans profitable, he said.

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Aetna hasn’t been turning a profit in Obamacare plans, the company has said. Guertin said its price hikes range from high single digits to the mid-teens, depending on the market. UnitedHealth Group Inc., the largest U.S. health insurer, has said its premium increases are in the double digits as well.

Comment by Don McCanne of PNHP: The performance of competing private insurance plans within the ACA exchanges is not much different from the performance of the pre-ACA private plans in the individual market. Trends in higher insurance costs, greater cost sharing, and narrower choices were already occurring, and they continue to grow progressively worse. Access and affordability can only suffer.

Higher premium credits and out-of-pocket subsidies are helping individuals with incomes near poverty levels, but, for middle-income families, they are inadequate to provide much benefit.

Higher premiums and more cost-shifting to patients are adequate to maintain profits for most larger insurers, but where even these measures are inadequate, insurers are pulling out of the exchanges, and some of the smaller insurers are even folding. Market manipulations create instability.

The insurers show their true colors through statements such as that of Anthem’s Chief Financial Officer Wayne Deveydt. Reporting to Wall Street analysts, Deveydt said about the market, “When you have fewer national enrollees and you have price points that we don’t believe are sustainable, we’ve just made a
conscious decision we’re not going to chase it.”

Higher premiums, greater cost-sharing, narrower networks - the behavior of the private insurers is not changing in spite of the promise of higher value and lower costs through the ACA Marketplaces. The ACA
exchanges are a creeping failure that is growing worse. Congress enacted the wrong model of reform. We
need single payer.

My comment: Health insurance should never be allowed to make a profit, any more than fire departments.