Insurance industry is preparing to leave Obamacare: Report
The Insurance Information Institute (III), a trade group that represents insurers, said in a report that insurance industry representatives were preparing to prepare for a potential future of the Affordable Care Act (ACA).
“The industry is actively preparing for a possible future of a repeal of the ACA that would put a severe dent in the ACA’s coverage and benefits and may well result in a significant reduction in the amount of coverage available to Americans,” the III wrote in a February report.
“The ACA has allowed insurance companies to make substantial premium cuts, even as the ACA has provided subsidies to insurers, and it has allowed insurers to offer greater risk pools than they otherwise would have had to pay out of pocket for most enrollees,” the report continued.
“As a result, the insurance industry is beginning to see a greater risk to its business than it has seen since the ACA was enacted.”
The III noted that “as insurance premiums continue to fall and premiums continue be cut, a number of major insurers have been making significant premium cuts as they try to maintain the financial stability of their businesses.”
The repeal of Obamacare has been a key reason why insurance companies are leaving the marketplaces, said the IIP.
“In addition to the cost reductions they are experiencing, the ACA also has resulted in significant premium increases for individuals,” the organization said.
“These premium increases have pushed insurers to reduce their risk pools and have allowed them to maintain a higher cost of coverage.”
The organization noted that many of the insurers that remain are also taking advantage of the Obamacare reinsurance program to reduce risk for their business.
In March, the IIO warned that the reinsurance programs could “limit access to the market for insurers that are not able to meet their costs” and warned that “if reinsurance cuts continue, the number of people with insurance will decrease, and the number with coverage will decrease.”
In addition, the report noted that the rate of growth of the uninsured in the country has slowed significantly in recent years.
The III also noted that in 2015, the United States had 1.5 million people without health insurance and it expects to reach 1.7 million by 2020.