This is from Jay Hancock writing for KHN and tne Washington Post
The Affordable Care Act requires exchange plans to cover anybody, no matter how sick, at regulated prices and often with large government subsidies.
Despite the prospect of millions of new customers and measures to cushion insurers with disproportionately high claims in the early years, carriers worry that the sick will be first to sign up while the healthy stay away. Fears grew after claims came in far higher than expected for temporary “high risk pools” that had been established by the law to cover the chronically ill until the full law took effect in 2014. The shortfall prompted the plans to close enrollment early.
“Insurance companies, very suddenly in my estimation, are getting very conservative and hesitant about being in the exchanges,” said Robert Laszewski, a Virginia-based consultant and former insurance executive. “All along everybody, including the companies, assumed they would be in a lot of exchanges.”
Carriers also fear Democrats will blame them if government-run online marketplaces suffer technical failures or run into other problems, Laszewski said.
UnitedHealth Group’s recent disclosure that it would offer plans in only a dozen state exchanges marked new disappointment for those hoping the exchanges will generate vigorous competition and new insurance for millions. Previously United had said it would sell on as many as 25 exchanges.
The company will “watch and see” how exchanges work, “approaching them with some degree of caution,” UnitedHealth Group CEO Stephen Hemsley told analysts last month.
Aetna plans to offer individual exchange policies in 14 states and may reduce that if some states look unprofitable or unprepared, CEO Mark Bertolini said on a conference call in late April. On June 17 Aetna disclosed it would stop selling individual insurance in California, the most populous state.
For its part, Cigna will focus on making exchange plans work well in five states rather than spreading efforts more thinly, said Ray Smithberger, who’s in charge of the company’s individual business.
“What you see in the general market is just a hesitancy” over whether states will be technologically ready, he said in an interview. “With condensed time frames, it’s important that we provide the right connectivity to ensure we’re providing the best experience for the customer.”
