Millions risk losing cover as Justices take up Obamacare Challenge

On the individual market, they had next to no data to go off of. Everything was more or less a guess based on a series of projections around the number of people purchasing on the exchanges and the demographic makeup of that group.

Remember before the ACA, insurance companies used a rigorous underwriting process to essentially cherrypick who they covered and what price they'd charge. Most states really didn't do a ton to regulate that process so insurance companies had tons of leeway to determine who would get coverage and at what price.

All of a sudden the ACA goes into force and the insurance companies can no longer pick an choose who they cover and their ability to set the price is significantly limited by the new community rating standard (along with a little leeway for age and smoking) This turned into a guessing game where insurance companies had to project enrollment figures and what kind of premiums they'd charge to different groups of people. They also lost the ability to project healthcare use since before they predicting health care use via their underwriting process and pricing accordingly. The only thing they could go off of were health care costs in each community but they still couldn't project how much of those services would actually be used by the new pool of customers in each community.

At the end of the day, this is a game of averages and this is the first year where we have data. Insurance companies (at least here in Minnesota) totally created a race to the bottom on prices as they were trying to underbid each other in order to gain a larger market share of customers on the exchange. It is also normal for insurance companies to make gigantic rate increase requests only to get shot down by regulators. (at least that is common here)

The ACA is merely an attempt to socialize the costs of insurance through the individual mandate (along with subsidies to help make those costs affordable) but the fundamental flaws of our system of insurance are still here. Our insurance system is a product of a historical accident that traces back to the early 1900s and it has grown so large that its simply to daunting to fix without totally disrupting and destabilizing the whole system.

 

They are going up big in Texas. It can be plan by plan though.

For many people the penalty is less than the amount of premium, but you would have no coverage. If you have no medical issues you'd win, if you do then you'd lose.

 

Love Gov

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Obamacare Death Spiral