4 ms·

In the insurance market, the quality of your customers matters more than the quantity. It's not like McDonald's, where every customer is profitable. So to me, i

In the insurance market, the quality of your customers matters more than the quantity. It's not like McDonald's, where every customer is profitable. So to me, it's not clear that insurance companies should always be grateful for more customers.

refurb 12y ago
Exactly! The gov't is the one who is mandating people sign up. Insurance companies are providing plans through exchanges. If the people who sign up are mostly sick or old (adverse selection), then the premiums the insurers set for 2014 are going to be inadequate. Next year they'll raise them to cover the costs and insurance companies will be blamed for being "greedy". That's what the insurance companies are afraid of.
- anigbrowl 12y ago
  But we already know that hasn't happened, with 28% of enrolees being the coveted 'young and healthy' demographic.
  - refurb 12y ago
    The administration's target was 38.5%! The 28% is a bit concerning since you want young people paying in but not taking much out. [1] http://www.bloombergview.com/articles/2014-04-21/are-obamacare-s-latest-numbers-good-news-or-bad http://www.bloombergview.com/articles/2014-04-21/are-obamaca...
- EpicEng 12y ago
  Insurance companies are fortunate to even exist under this scheme. There is certainly much I do not know about this industry, so correct me if I'm wrong, but isn't their primary function one of assessing risk? When the entire populous is forced to pay for some sort of health coverage, where does the insurance company continue to provide value?
  - refurb 12y ago
    I think the issue is that since the penalties for not signing up have been delayed, not everyone is signing up. If only the sickest ones sign up, you're in trouble!
    - EpicEng 12y ago
      Yeah, I realize they're having a problem with that, though I'm not sure what they expected. Young people don't exactly jump at the chance to pay for something they don't want on a deadline.

refurb 12y ago

Exactly! The gov't is the one who is mandating people sign up. Insurance companies are providing plans through exchanges. If the people who sign up are mostly sick or old (adverse selection), then the premiums the insurers set for 2014 are going to be inadequate. Next year they'll raise them to cover the costs and insurance companies will be blamed for being "greedy". That's what the insurance companies are afraid of.

anigbrowl 12y ago
But we already know that hasn't happened, with 28% of enrolees being the coveted 'young and healthy' demographic.
- refurb 12y ago
  The administration's target was 38.5%! The 28% is a bit concerning since you want young people paying in but not taking much out. [1] http://www.bloombergview.com/articles/2014-04-21/are-obamacare-s-latest-numbers-good-news-or-bad http://www.bloombergview.com/articles/2014-04-21/are-obamaca...
EpicEng 12y ago
Insurance companies are fortunate to even exist under this scheme. There is certainly much I do not know about this industry, so correct me if I'm wrong, but isn't their primary function one of assessing risk? When the entire populous is forced to pay for some sort of health coverage, where does the insurance company continue to provide value?
- refurb 12y ago
  I think the issue is that since the penalties for not signing up have been delayed, not everyone is signing up. If only the sickest ones sign up, you're in trouble!
  - EpicEng 12y ago
    Yeah, I realize they're having a problem with that, though I'm not sure what they expected. Young people don't exactly jump at the chance to pay for something they don't want on a deadline.