Open Enrollment for 2016 is now in full swing and customers are asking a lot of hard questions, fair questions, questions that demand an answer. Most of the questions and frustrations center around one thing: rate increases. On a near daily basis, insurance companies, agents and brokers are having to try to explain why the cost of insurance is soaring and how families and individuals are supposed to step up and meet the rising costs. Prior to Open Enrollment, Blue Cross Blue Shield of North Carolina made a strenuous effort to try and answer some of these questions in advance, stating that the “goal, as always, is to offer health coverage that our customers can depend on at rates as affordable and sustainable as possible.” Blue Cross went on to explain why a rate increase was imperative in order to maintain viability. In fact, the company provided claims data for 2014 and the first half of 2015, reporting a $132 million dollar loss on ACA business alone. At that time, BCBSNC explained two important trends: First, there was no slowdown in any residual demand for medical services from new customers entering the health insurance marketplace after the induction of the ACA and second, there was a prevalence of more chronic health conditions needing medical treatment among ACA customers.
In more recent news, United Health Care has announced it may completely pull out of ACA Exchanges in 2017, citing significant losses on ACA business as the reason for this consideration. The New York Times reported that United Health Group told investors “it was significantly lowering its profit estimates and blamed an expected loss of hundreds of millions of dollars selling individual policies under federal health care law” (11/20, B1, Abelson, Subscription Publication). The article further stated “the company said it was estimating losses of more than $600 million from its exchange business, before taxes, in 2015 and 2016.” With this announcement, customers are once again faced with hard questions about what is happening in the health insurance industry. (more…)