When you clear away the fog and the political promises, the fact remains that premiums must cover incurred claims, and the costs of administration.
Obamacare and its far reaching impact may be hitting a point where premiums are in an upward cycle and enrollment downward. Much of the current situation is caused by adverse selection; that is, allowing anyone regardless of their health status to enroll. At the same time young healthy people have no strong incentive to obtain coverage because of the cost and the weak application of the penalty fee for not having coverage. [See below] Add in the extra costs from mandated benefits and you are headed toward a unaffordable upward spiral.
No insurance pool can be sustained unless (1) there is a broad actuarially sound risk pool (meaning some of the insured have no claims and their premiums support others), or (2) you can set premiums at the level that supports the risk of the enrolled group (which Obamacare prevents).
Under the ACA, insurers have seen an influx of new membership in individual plans and in Medicaid plans they administer for the government, expanding the industry’s total U.S. revenue to $743 billion in 2014, the year the law’s biggest changes took effect, from $641 billion the year before, according to a new analysis by consulting firm McKinsey & Co.
But much of that growth has been unprofitable. Health insurers lost a total of $2.5 billion, or on average $163 per consumer enrolled, in the individual market in 2014, McKinsey found. A number are also expecting to lose money on their marketplace business for 2015.
Wall Street Journal November 2, 2015
Some of these excuses seem rather strange. I circled one of my favorites. Excuse # 8 seems rather strange as well. If you had the insurance you were supposed to have in the first place … Oh well, it’s government bureaucrats writing this stuff😷. And remember, even if you owe the penalty, the only way it can be collected is if it’s deducted from your tax refund … are you scared?😡