Insurers’ Losses Nearly Double In Second Year Of Health Law, Due Largely To Medical Costs
However, a McKinsey & Co. analysis suggests that the health law’s subsidies should prevent a “death spiral,” in which an insurance market gets caught in a cycle of increasing rates and shrinking customer pools.
The Wall Street Journal:
Insurers’ Losses Deepened On ACA Plans In 2015
Many insurers have lost money on the Affordable Care Act plans they sell to consumers. A new analysis shows how much those losses deepened in 2015, the second year of the law’s signature exchanges. Based on insurers’ filings with state regulators, McKinsey & Co. estimates the health-insurance industry’s cumulative margin on individual plans last year was between -9% and -11%. That is roughly double the -4.8% margin the consulting firm calculated for 2014. For 2015, only about a quarter of insurers reported that they made a profit on their individual plans. (Wilde Mathews, 5/15)