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The problem is that in order to do true risk pooling, you need to be able to charge based on risk. The ACA (Obamacare) has eliminated much of that making the co

The problem is that in order to do true risk pooling, you need to be able to charge based on risk. The ACA (Obamacare) has eliminated much of that making the cost the same for everyone at a given level. And it turns out that many healthy people have continued to opt out and many of the new enrollees are people who couldn't get coverage elsewhere. None of this is a judgement, just the raw math of the situation. Here's one sample but the problem is nationwide: "“Our enrollees generated 24 percent more claims than we thought they would when we set our 2014 rates,” said Nathan T. Johns, the chief financial officer of Arches Health Plan, which covers about one-fourth of the people who bought insurance through the federal exchange in Utah. As a result, the company said, it collected premiums of $39.7 million and had claims of $56.3 million in 2014. It has requested rate increases averaging 45 percent for 2016." Ref: http://www.witn.com/home/headlines/-Health-Insurance-Companies-Seek-Big-Rate-Increases-for-2016-311630751.html http://www.witn.com/home/headlines/-Health-Insurance-Compani...

hackuser 11y ago
> The problem is that in order to do true risk pooling, you need to be able to charge based on risk. The ACA (Obamacare) has eliminated much of that making the cost the same for everyone at a given level. Why is that a problem? I'm not sure why a less diverse risk pool is inherently better than a more diverse one. Certainly I want very ill people to receive medical care, and it seems as broad as possible a risk pool facillitates that. > it turns out that many healthy people have continued to opt out and many of the new enrollees are people who couldn't get coverage elsewhere. Don't opt-outs have to pay the fine, which funds medical care regardless (or do those funds go elsewhere)? The fines might be less than insurance payments, but I'd assume they are all profit. The opt-outs consume generate zero claims and costs from insurers. The paragraph you quote doesn't say healthy people are opting out; it says the insurance company is claiming higher costs than they expected and wants a rate increase. Their expectations could have been wrong, or they simply might want to raise rates and are making a case for it (or their claim could be legitimate, of course); I'd guess reality is some mix of the three.

hackuser 11y ago

> The problem is that in order to do true risk pooling, you need to be able to charge based on risk. The ACA (Obamacare) has eliminated much of that making the cost the same for everyone at a given level. Why is that a problem? I'm not sure why a less diverse risk pool is inherently better than a more diverse one. Certainly I want very ill people to receive medical care, and it seems as broad as possible a risk pool facillitates that. > it turns out that many healthy people have continued to opt out and many of the new enrollees are people who couldn't get coverage elsewhere. Don't opt-outs have to pay the fine, which funds medical care regardless (or do those funds go elsewhere)? The fines might be less than insurance payments, but I'd assume they are all profit. The opt-outs consume generate zero claims and costs from insurers. The paragraph you quote doesn't say healthy people are opting out; it says the insurance company is claiming higher costs than they expected and wants a rate increase. Their expectations could have been wrong, or they simply might want to raise rates and are making a case for it (or their claim could be legitimate, of course); I'd guess reality is some mix of the three.