2014
Love it or hate it, Obamacare makes health insurance more accessible to a lot of Americans. However, in doing so setting premiums and estimating risk is turned upside down. Nobody knows in advance who will enroll or how much health care they will use. This is a special risk for people who did not previously have coverage. To minimize this risk for insurers and individuals paying premiums there are several elements of the Law spreading the risk among insurance companies and among all health plans, including employer plans (and indirectly their employees).
The Kaiser Family Foundation has prepared a report explaining the three ways risk is being spread among all Americans. The chart below was prepared by the KFF.
In the short term such risk adjustment is necessary, but it also points out the weakness in a system attempting to provide affordable health care coverage to all parties. The real test will begin in 2015 when adverse selection experience is better known and again after the reinsurance and risk corridors expire in three years (assuming they are allowed to expire).
For now keep in mind that nothing is real when it comes to health insurance premiums under the Affordable Care Act.
VOTE IN OUR LATEST POLL
QUINNSCOMMENTARY 