Your observations confirm my understandings. My wife was in management for large clinics in major healthcare systems and left seeing the impending nightmare takeover.
I will agree with you on one thing. The Insurance giants won’t automatically recreate certain types of policies if ACA is either thrown out by the court or repealed. They will want to have the large deductibles stay. If small carriers get policies out the door and capture a lot of coverage until their underwriting strength is fully used, then the larger companies my start to write more old style policies to compete with the small carriers. It will be another three years of screwed up insurance market climate just like the last three as they jacked around finding a cruising speed during the implementation.
If someone starts to write a hospitalization and major med policy with a large deductible, many people will decide to just “go naked” on general healthcare in a repeal market. So it is all up to the small carriers’ ability to offer tailored coverage quickly to serve the demand. The large carries will have one break ranks and they will all be back in the market but it will take a full three year screwed up mess.
The problem with small carriers in the health market is that they really can’t afford to be in this volatile market without limiting the coverage and/or deductibles.
Why? Because rates are controlled by two things, depending on the state.
1. When states’ insurance commissions set or approve rates, they are always looking backward at losses and expenses. It’s difficult, if not impossible, to set forward rates that will be equitable that way.
2.Because of the rating structure above, the small insurance companies do everything possible to limit payouts according to the strict application of their policies so they can make an underwriting profit. Big companies, like Aetna, can absorb underwriting losses with income from interest on large volumes of premiums. Smaller companies don’t have as much of a cushion in the form of interest income. And there are some very shady small companies who have issued policies with severe limitations that owners don’t read when they apply or that are glossed over by unethical salesmen.
One of the most overlooked problems faced by insurance companies is that lots of folks apply for policies AFTER they are already diagnosed with an illness or pregnancy. This is fraud and they are usually found out and their claim is denied. This is one reason individual policies have such a short shelf life. People drop them as soon as they are paid for an illness or they are denied.
The idea behind Obamacare that you can accept these folks with pre-existing conditions and still have premiums reduced is a mathematical impossibility and a fraud perpetrated on the public in selling Obamacare.