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Health Insurer Losses on Obamacare Marketplaces Will Likely Lead to Higher Premiums

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AP
• April 25, 2016 2:04 pm

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Health insurer losses on the Obamacare marketplaces will likely lead to higher premiums, the Hill reported.

UnitedHealth has announced they will cut participation in the Obamacare exchanges down to a handful of states. The company has already lost $475 million in 2015 and projects to see losses of $650 million this year.

"Many insurers have been losing money on the Obamacare marketplaces, in part because they set their premiums too low when the plans started in 2014," the article states. "The companies are now expected to seek substantial price increases."

According to Sabrina Corlette, a professor at Georgetown University’s Center on Health Insurance Reforms, the final picture remains unclear.

"There are absolutely some carriers that are going to have to come in with some pretty significant price hikes to make up for the underpricing that they did before," she said.

"The industry is clearly setting the state for bigger premium increases in 2017," said Larry Levitt, an expert at the Kaiser Family Foundation.

A report from the Blue Cross Blue Shield Association finds that new Obamacare enrollees had 22 percent higher medical costs than individuals who received coverage through their employer.

"UnitedHealth has announced it is pulling out of the Obamacare exchanges," said presidential candidate Sen. Ted Cruz (R., Texas). "That’s the latest in a string of Obamacare failures that have led to American families losing their doctors, having few or no insurance options, and facing skyrocketing premiums and deductibles."

Published under: Obamacare, Obamacare Exchanges