Wednesday, July 8, 2015

Insurance Losses Because of ACA?

One newspaper report shows insurer losses over $300 million for one year. In that state, that amounts to $70/resident but $1,600 per enrollee or $150/month or about 50% underfunded on premiums. Nationwide, the loss is expected at nearly $8 billion or $1000/enrollee.

When the nationwide average premium for individuals, provided by employers, runs $4-5K, it was a bit odd to consider that ACA could do the same for $2-3K. This was predictable. Unless the underlying reasons for using medical providers, facilities, etc. is reduced, costs won't be. It was unrealistic that some magic was going to occur to reduce premiums 'forever'.

I suppose the underfunding of insurers' costs with reduced premiums was a 'marketing' strategy, but it's starting to backfire. It's like saying "Hey, your phone bill will only be $40/month for the next 12 months...oops, the second year is going to be $60/month." We've learned to watch for those.

Why couldn't everyone be more honest about the real costs upfront? The info was there.

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