Health Insurers Struggle to Offset New Costs
This article by Louise Radnofsky and Ann Wilde Mathews for the Wall Street Journal may be of interest to subscribers. Here is a section:
Humana’s announcement follows a disclosure from UnitedHealth Group Inc. last month that, amid deepening losses, it will next year withdraw from all but a handful of the 34 states where it was offering exchange plans.
Anthem and Aetna Inc. were far more upbeat about their prospects on the health-law marketplaces in recent earnings calls, but both have also said they aren’t yet achieving their targeted margins and aim to improve results next year.
Insurers seeking rate increases—which include several other big plans in Oregon and Virginia—all cite the higher-than-expected medical costs incurred by their enrollees as factors in their decision.
In Oregon, regulators’ filings show Moda Health Plan Inc., once the largest insurer on the exchange, saying it needs to hike premiums there by an average of 32.3%. That is coming on the heels of an increase of around 25% last year; the insurer also said it would stop selling individual plans in Alaska.
For anyone outside the USA who wonders why people might be unhappy with Obamacare the simple answer is many middle class consumers are paying a lot more but for reduced service. This has translated into a great deal of dissatisfaction with the ruling elite which boosted the campaigns of both Donald Trump and Bernie Sanders in their respective primaries.
As a side bar, if the number of posters, bumper stickers, lawn signs and people wearing T-shirts is any guide, Bernie Sanders is going to poll highly in the Southern California primary..
Right now the S&P500 Life and Health Care Index is being led lower by life insurers as the value of the assets they have under management is affected by the corrective phase on Wall Street. The Index exhibits a completed Type-3 top formation and is now pulling back from the lower boundary. A sustained move above 300 will be required to question medium-term supply dominance.
Among health insurers there are clear winners and losers. For example Molina Healthcare is accelerating lower while UnitedHealth Group remains in a reasonably consistent medium-term uptrend.
