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Friday, January 10, 2014

Obamacare risk pool "more adverse than previously expected."

The lesson to take away from the Obamacare enrollment numbers is that the Obama Administration is pretty good at selling health insurance to sickly people. While HHS has treated enrollment data as something akin to the nuclear codes that cannot be shared with the public Humana Inc released this guidance:
Health insurer Humana Inc said on Thursday that it projected its enrollment mix in private plans through the exchanges created by President Barack Obama's healthcare law will be, "more adverse than previously expected."
Humana attributed the enrollment trend to regulatory changes allowing people to remain in previously existing plans not sold on the exchanges. Obama proposed allowing insurers to keep selling plans that did not comply with the Affordable Care Act after political fallout that he was not keeping his promise that people can keep insurance plans if they like them.
In other words Obamacare is largely a high risk pool. As the "more adverse than previously expected" mix is reflected in next year's premiums the public can expect to be treated to a new round of sticker shock. When the healthier enrollees are priced out of the market the mix will become more adverse. This is the so called "death spiral" or in more graphic prose, the swirly.

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