Obamacare: Good For Who? Big Insurers. Most Customers? Rate HikesPosted: June 23, 2014 | |
Obamacare is looking better than ever for the biggest insurance companies, and they’re prioritizing boosted earnings over expanding Obamacare coverage, according to a memo from Moody’s Investor Service.
“The premium increases show that insurers have chosen to protect earnings margins rather than push membership growth.”
Moody’s is optimistic about insurers’ credit ratings, noting that more insurers are expected to join Obamacare exchanges or offer more plans — and fewer enrollees for each insurer is likely to be beneficial, given early reports that Obamacare customers’ are sicker and costlier to insure than other insurance pools.
“Since the policy-buying population has an unknown medical status and potentially unfavorable risk characteristics, less membership, and therefore less risk, is credit positive,” Moody’s concluded.
And insurers aren’t prioritizing actually expanding health coverage to many more people, according to the report. Large insurers are boosting their premiums after generally losing money or breaking even with their first year of customers, according to the report.
“The premium increases show that insurers have chosen to protect earnings margins rather than push membership growth,” Moody’s wrote.
The continued premium hikes aren’t surprising, according to the memo, as medical costs are still rising post-Obamacare, despite the Obama administration’s promise that it would lower costs. With new Obamacare taxes going into effect every year, many of which will be passed onto consumers, it’s unlikely premiums will be lowered anytime soon…. (read more)
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- 3,137-County Analysis: Obamacare Increased 2014 Individual-Market Premiums By Average Of 49% (forbes.com)
- Thanks Obamacare: North Dakota Insurance Customers To See 14.4 Percent Premium Hike (sayanythingblog.com)