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  • Purveyor (2633 posts)
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    A Sign That Obamacare Exchanges Are Failing

    FEB 16, 2017 12:35 PM EST
    By Megan McArdle

    Yet more bad news for Obamacare this week: Molina Healthcare lost $110 million on the exchanges last year, and the CEO told investors, “There are simply too many unknowns with the marketplace program to commit to our participation beyond 2017.”

    At first glance, it’s hard to see why this piece of news is worth worrying about. UnitedHealth recently projected several times those losses, and it’s a bigger player on the exchanges. Why spend so much time looking at one modest-size insurer?

    Because Molina is one of the companies that has been repeatedly pointed to, by virtually every health-care-policy wonk in the business, as one of the “bright spots” on the exchanges. Molina is a company that specializes in covering poor people. Before Obamacare, they were a sizable player in the “Medicaid managed care” model, and it seemed like the expertise they’d thusly acquired was allowing them to design the sort of plans that actually made money on the exchanges. Which is to say bare bones plans, not fancy but adequate. Apparently, that’s no longer a money-maker, at least for Molina.

    This isn’t necessarily the pattern we’ve seen with other insurers. Molina seems to have made money until it was forced to pay into a fund designed to transfer money from insurers that ended up with an unusually healthy patient pool, to those who got stuck with the sicker patients. Those losses were partially offset by lower medical costs than they expected, which is certainly good news. But it’s not great news. Lower-than-expected costs can be from the system working well, or they can simply come from the fact that you happened to get a healthier insurance pool. If the government makes you give the latter gains back, and more, then you’re still not going to be profitable. And insurers that aren’t profitable over the long term aren’t going to stick around.



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10 replies
  • mmonk (1837 posts)
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    1. Well sure when they dismantle it. No brainer.

    My family will not accept the Republican alternative that says we who purchase our own insurance can chooose between HSA’s and high risk insurance pools we can struggle with to afford. Damn this red neck trash banana republic for the rich that tells us to eat worms and die. My two cents. We have an intellect and a f*cking soul.

    • FanBoy (7985 posts)
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      6. +100

  • Scott Crowder (622 posts)
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    2. Well, I guess health insurance companies are a failed idea then

    If they can’t actually make money insuring people then health insurance is simply a failed concept.  Time to give up on it and move on to a responsible system of healthcare then.  Single payer universal healthcare with no insurance companies.  Government sponsored healthcare for all.

    Like every other intelligent nation on earth is already doing.

    Think of all the “moderates” who, throughout history, have failed to oppose state-sanctioned aggression, oppression, and abuse, from slavery to child labor, while maligning those who call for change as dangerous and misguided, violent radicals. And yet, in retrospect, when a renewed social contract is established as the new normal, the unlawful actions that brought about these societal shifts are turned into mythical tales of nationalistic heroism and dates for kids to memorize at school.
    • FanBoy (7985 posts)
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      7. +100

  • quinn (125 posts)
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    3. Flip side, what cause that.

    People seeing doctors?

  • Doremus Jessup (2975 posts)
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    4. Every profit and loss statement

    changes by the day which is why there are such things as actuaries in the Insurance field. Take away some of the industry perks and tax free status and other parts of the P & L would not be so profitable. Without the need for a double digit ROI it wouldn’t be as big a deal. They are charging outrageous sums of money to people with no insurance and that is what they want to be able to continue to do. The poor and uninsured cannot bargain for discounts.

    Fighting for peace is like screwing for virginity. End ALL occupations and bring the troops home.
    • FanBoy (7985 posts)
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      8. +100

  • davidgmills (5712 posts)
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    5. It was designed obsolescence.

    Surprised it didn’t break sooner.

    French Revolution; not secession.
    • FanBoy (7985 posts)
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      9. +100

  • DoctorJ (605 posts)
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    10. Our best hope is that it gets so bad that we adopt a SP system

    But the insurance and drug lobbies won’t let that happen, so I don’t see the end game.

    Conservatives are fond of telling us what a wonderful, happy, prosperous nation this is. The only thing that matches their love of country is the remarkable indifference they show toward the people who live in it. - Michael Parenti