Skip to comments.Massive shortfall in government payouts to insurance companies promises big premium increases
Posted on 10/27/2015 7:50:49 AM PDT by SeekAndFind
The government program to reimburse insurance companies with big losses as a result of signing up too many old and sick customers is massively short of funds and could cause some companies to either go under or get out of the Obamacare exchanges.
The so-called "risk corridors" that forced profitable companies to pay into a fund that would be disbursed to companies who lost money is underfunded by 88% and will almost certainly lead to big changes in premiums and consumer choice on the exchanges.
Obamacare insurers requested about $2.9 billion in risk corridor payments for the 2014 calendar year, but they only received $362 million, a mere 12 percent of what they asked for. The shortfall happened because insurers requested more than what was paid into the program.
The result has been devastating for some insurers. WinHealth, which provides coverage in Wyoming, went into receivership last week because of a low risk corridor payment.
It will suspend insurance sales in 2016, leaving about 8,200 residents to search for a new plan from the sole remaining insurer in the Obamacare marketplace.
In addition, nine taxpayer-funded insurance co-ops have closed recently, with some blaming the low payments.
The shortfall hit small insurers that don't have enough reserves to cover them, said Deep Bannerjee, director of ratings at credit ratings agency Standard & Poor's.
Bannerjee didn't give an exact number on how many insurers could fall but said the "shakeup will continue."
Instead of shutting down, insurers most likely will react to the shortfall through raising premiums since they can't count on the risk corridor money, he said. They also could shift their plans away from offering a more open network to a narrow network such as an HMO.
(Excerpt) Read more at americanthinker.com ...
Aren’t insurance companies also restricted in how much they can raise insurance rates under CommieCare?
Sounds like they will be squeezed out of business by their competition; the single payer government health provider.
. . . and single payer to the rescue . . .
Do they mean higher than they’ve already gone?
And the worst part is that Obama, the Dems and the MSM will be able to demonize insurance companies as if they are doing this on their own to hide the fact that its really Obamacare that created the mess.
We, the informed voters, could see this coming a mile away. The frustrating thing is that the majority voters in the past and future elections don't have a clue that they have been scammed and that it was all a big crock of poop.
I bet most of the proponents of Obamacare are now trying to figure out how to game the system so that they don't have to pay the premiums and maybe even get free health care while the rest of us law abiding tax payers pay for their stupidity.
Bingo. I thought it would happen in the next administration. But we may get single payer a lot sooner than that.
Oh you’re kidding.
But I thought it would be like $15/hour minimum wage where a company would just absorb the extra cost rather than passing it on... no?
economics is hard
until Obama’s hide is nailed to the wall, there is no solution
Pelosi’s and Reid’s need to be nailed there also
No worries. This is actually double-plus good.
Something good in the cromnibus.
Health insurance is not worth the cost, which is why I don’t have any.
The insurance companies expected the democrats to keep their end of the bargain? HA!
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.