Posted on Apr 3, 2016
Highmark reveals final tally on big Obamacare loss
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RP Members will the Affordable Care Act survive?
Highmark said Friday it lost nearly $600 million in 2015 on plans sold on the marketplace that's central to the Affordable Care Act.
The Pennsylvania-based health insurer attributed the loss largely to customers who turned out to be much sicker than expected. That's similar to many insurers around the country, likely reflecting people who had gone many years without insurance and regular access to medical care.
Highmark said it paid out $1.20 in medical costs for every $1 it collected in premiums for people who bought plans through the ACA marketplace.
Highmark said Friday it lost nearly $600 million in 2015 on plans sold on the marketplace that's central to the Affordable Care Act.
The Pennsylvania-based health insurer attributed the loss largely to customers who turned out to be much sicker than expected. That's similar to many insurers around the country, likely reflecting people who had gone many years without insurance and regular access to medical care.
Highmark said it paid out $1.20 in medical costs for every $1 it collected in premiums for people who bought plans through the ACA marketplace.
Highmark reveals final tally on big Obamacare loss
Posted from pennlive.comPosted in these groups: 
ObamacareHealth Insurance Portability and Accountability Act Certification (HIPAA)
Insurance
ObamacareHealth Insurance Portability and Accountability Act Certification (HIPAA) Insurance
Edited >1 y ago
Posted >1 y ago
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COL Mikel J. Burroughs, anyone, even a neophyte, that dwells in the world of group health insurance, knew all along that this plan would never succeed. It's group health insurance 101. A group (generally employer groups/companies) must be an homogenous group that is generally composed of a cross section of people by age, sex and health condition.
The insurance company then sets a rate based on underwriting review that will allow for claims, expenses and profit. When claims and expenses exceed premiums, a loss occurs.
When only those in need are in a health plan, losses will almost invariably occur. Such groups then enter a phase called the death spiral wherein the healthier will leave for less expensive options and the sickest will remain. Thus, claims and expenses will continue to exceed premiums in an ever increasing percentage, which reduces participation and premiums and voila, the death spiral.
I was in the group health insurance business for twenty-five years. Believe me, all group health insurance professionals know this, especially senior management.
To think that insurance companies did not convey this to government officials (assuming that it's possible they weren't aware of these basic concepts), is simply inconceivable. LTC Stephen F. SSgt (Join to see) COL Jean (John) F. B. PO2 Mark Saffell
The insurance company then sets a rate based on underwriting review that will allow for claims, expenses and profit. When claims and expenses exceed premiums, a loss occurs.
When only those in need are in a health plan, losses will almost invariably occur. Such groups then enter a phase called the death spiral wherein the healthier will leave for less expensive options and the sickest will remain. Thus, claims and expenses will continue to exceed premiums in an ever increasing percentage, which reduces participation and premiums and voila, the death spiral.
I was in the group health insurance business for twenty-five years. Believe me, all group health insurance professionals know this, especially senior management.
To think that insurance companies did not convey this to government officials (assuming that it's possible they weren't aware of these basic concepts), is simply inconceivable. LTC Stephen F. SSgt (Join to see) COL Jean (John) F. B. PO2 Mark Saffell
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LTC Stephen C.
CPT Pedro Meza, I guess we'll just have to disagree on this one. If insurance companies are good at anything (generally), it's assessing risk. Each company has platoons of actuaries and underwriters to make such risk determinations. Perhaps common sense was not used, but I attribute that to the executive and legislative branches of the U.S. government. COL Jean (John) F. B. PO2 Mark Saffell
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CPT Pedro Meza
LTC Stephen C. - Sorry but you can not blame the government for poor judgement of a business man. I don't sell insurance but I knew for a fact all those that had no insurance would buy it, and they were some mighty sick folks.
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CPT Pedro Meza
LTC Stephen C. - Them " platoons of actuaries and underwriters to make such risk determinations" need to be fired, cause they were wrong; a good commander would have verified.
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LTC Stephen C.
CPT Pedro Meza, I can and do blame the U.S. government. The Affordable Care Act was passed by Congress at the behest of the President. If insurance companies had been allowed to price the care appropriately, they would have done so. However, the concept of adverse selection (aka the death spiral), simply made that impossible.
As I said, we'll just have to agree to disagree. You may continue to argue if you wish, but I'm done. COL Jean (John) F. B. PO2 Mark Saffell
As I said, we'll just have to agree to disagree. You may continue to argue if you wish, but I'm done. COL Jean (John) F. B. PO2 Mark Saffell
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Also I'm fully convinced it was meant to fail. "We tried to do this with privatized but greedy insurance companies, the only way to make t work is to create a completely government run system."- quote from some future politician's speech
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COL Mikel J. Burroughs That doesn't surprise me. If you are going to have socialized medicine, then you have to have socialized medicine. If you are going to half ass it, then you are going to get results like this.
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