Big Healthcare Marketplace Changes Anticipated in 2017

It will be a tough first quarter for insurance carriers in the Healthcare Exchange Market who will report their dismal earning and loss ratios in the new marketplace created by the Affordable Care Act (ACA).  United healthcare expects to lose nearly $1 billion on Obamacare policies, the nation’s largest insurer reported in January.  While United healthcare does expect their membership to grow to 800,000, losing a billion dollars is simply not in the DNA of any insurance carrier.  Aetna, the third –biggest health insurer is also concerned about the future of the marketplace.   Blue Cross of NC is expected to lose more than $400 million on its first two years in the Marketplace business.  Things have gotten so bad in NC; the company has eliminated sales commissions for agents, terminated advertising, and stopped accepting applications through the on-line portal.  

At Muneris, we have made a conscious effort to help folks purchase insurance in the new healthcare marketplace.  Lots of people don’t have health insurance available at their job, many folks work part-time jobs, and in Southwest Virginia – many folks qualify for premium tax subsidies which makes healthcare affordable.  

We realize that the health insurance industry didn’t get the millions of customers promised by the Obama administration.  In the beginning, some 40 million Americans were required to purchase health insurance or pay a penalty.  The penalty is far less of a pain than purchasing insurance during the Annual Open Enrollment Period- which made 2016 a year of reflection for all insurers.  The risk corridor reimbursements have been delayed, the loss ratios are abysmal, and many folks are buying health insurance in the marketplace based upon a rather loose requirement for a Special Qualifying Event – with pre-existing conditions – which makes the overall risk of the population disastrous.

At Muneris, we are concerned about the future of the marketplace.  Without major changes, and a government capital infusion to help the insurance industry offset losses, we feel this market is not sustainable.  We need more healthy folks to purchase insurance in the marketplace, or could we be headed for nationalized healthcare?  Stay tuned… we also have a Presidential election to digest.  Pass me the Tums.

 

Burman S. Clark

Burman S. Clark

Burman S. Clark, RHU, CSA is the President of Muneris Benefits and a licensed insurance broker and consultant. His independent practice and focuses on employee benefits, individual life, disability, medical, and senior products. Burman has traveled extensively and provided guidance to large employer associations with regards to the Affordable Care Act.