2016 Obamacare Outlook

2016 Obamacare Outlook

One on the more Obamacare fluent reporters just emailed me a list of questions regarding the 2016 outlook for Obamacare.

I thought I would share my responses together with you:

According to early CMS data, 38% of exchange enrollees are under age 35. Is the risk pool beginning stabilize? 

It's to soon to know in the event the pool is starting to stabilize. First, the administration's announcement that 38% with the pool is below age 35 is disingenuous. They are counting all in the children that demonstrate up for the rolls making use of their families. They did not give to us the a lot more important age 18-to-35 number.

Second, the subsidy eligible exchange penetration stood at about 35% following 2015. Ideally, Obamacare has to about double its penetration in the eligible to assure balanced pool with the sick as well as the healthy.

Then naturally, we always see these big enrollment numbers being announced from the administration merely to see the block shrink dramatically by year-end.

So, it'll really be per year before all on the dust settles around the 2016 enrollment and now we really know what are the claim levels are in accordance with the premiums charged.

2016 Obamacare Outlook

If rates increase excessive in 2017, will those younger people jump ship?

I worry a little more about the really poor take-up rates with the healthy those who have not opted in the 200% of federal poverty level and above brackets than I be worried about the percentage with the young who have joined. Way an excessive amount emphasis is put with this age 18-to-35 statistic. Yes, they're more often healthy but under Obamacare the youngest pay one-third the premium from the oldest. We really require healthy to subscribe in much larger numbers, that contain so far been ready, in excess of we require the young.

Will the more expensive tax penalty for not having coverage prompt more young and healthy individuals to enroll?

I am sure it's going to help--come March once we see who finally ends up paying their first month premium we are going to know how much.

What about people that don't be eligible for a subsidy?

This could be the great untold-story. About half from the individual market doesn't be entitled to a subsidy. We know already the take-up rate for subsidized population from the 300% in the federal poverty level to 400% on the federal poverty level is dismal. Those who get no subsidy can be extremely taking these higher premiums and deductibles around the chin. A great many insurance agents regularly email me because of their market experiences.

Here is but one such comment I got a couple weeks ago: "I also have more people this current year weeping and overwhelmed on the astronomical premiums, even WITH subsidies and value sharing. Many say, 'But this is a mortgage payment."

Do you believe UnitedHealth will leave the exchanges?

I think their dramatic announcement surrounding their very real and huge losses late recently was more details on negotiating favorable terms inside future than leaving what is now the entire individual medical health insurance market.

I have said for a long time that the Obama administration on it's own could fix much--but not all--of what's wrong using the Obamacare insurance enterprize model if they would likely get out of denial and obtain to work on some practical solutions. My sense is the fact that is what United was trying to get those to do using pretty direct threat.

The carriers fully grasp this and I am certain there are numerous pretty direct conversations now going on using the administration behind the scenes especially within the ongoing "special enrollments." 

Will other carriers escape Obamacare?

The real decisions will likely be made as soon as the election when the medical health insurance companies start to see the 2016 claim results and whether there is any hope this is fixed through the new Congress and President. Even if your claims levels stabilize at extremely high premium levels it can be clear it's not working for all those above 200% in the poverty level. No one from the industry, including me, thinks Obamacare are going to be repealed. But it needs major repair. The only question for you is who will take action?

Will we come across new entrants?

If a start-up like Oscar could be successful we can easily get a new wave of players. The co-op fiasco proves it's not possible to enter marketing ebay without a viable business strategy plan and being well capitalized.

Will provider-based plans keep growing?

This question for you is tied to the full issue of provider risk-taking to be a viable structure. So far, these structure haven't shown to be any more successful that within the last iteration inside late 1990s. But time will state and I really hope we are able to get it right on this occasion and finally look for a viable method of getting away from fee-for-service reimbursement.

What do providers should compete together with the established carriers?

Literally all from the health insurance company competencies. The co-ops proved what things can happen once you don't get this list of these things from the beginning. Provider management themselves is far from enough.

What will you see as being the future to the co-ops left standing?

Grim. The AP recently reported which the average loss from the first nine months of 2015 was $20 million per co-op with none of them from the black. This is just an extremely bad strategic business plan and they can be undercapitalized.

Saying they may be in trouble because Republicans cut their risk corridor payments is a lot like saying a derelict boat sank due to bad storm.

Will the tiny business SHOP exchanges keep struggle?

Yes, employers value their broker/agent relationship. Here's a flash--brokers have value with their clients.

How will the presidential election impact exchanges?

It depends upon just what the new Congress seems as if and who's President. A Republican Congress which has a Republican President is usually a world of difference from the Democratic Congress along with a Democratic President. Not to mention who that President is. A divided government would create another group of possibilities.

Bottom line: Obamacare isn't sustainable politically or financially rolling around in its current state only when because of what lengths short it really is falling for the people subsidy eligible quickly 200% with the poverty level and for your 50% in the individual health care insurance market that will not get a subsidy.

If Obamacare can increase its penetration in the December degree of 35% from the eligible group up to 30% within this 2016 open enrollment, the administration along with their supporters will probably be heralding the "huge success" of Obamacare come March. But whenever they did that they can would still have only 45% from the eligible group and I doubt the penetration above 200% on the poverty level would certainly be anything besides dismal.

I try to find lots of spin within the part with the administration and supporters because the 2016 open enrollment stops.

But I don't go to a result that from the end really changes the overall game.

During the election season Democrats can't admit Obamacare is broken and Republicans can't be honest won't be repealed. 

The big question which will remain is: Who will fix Obamacare?

2016 Obamacare Outlook