Conflicting Messages from HHS
Included in the Affordable Care Act (ACA)—otherwise known as “Obamacare”—was the establishment of health insurance exchanges—public online portals where people would be able to shop for either individual or small group health insurance plans offered by private insurers or by newly-created health insurance co-ops. These exchanges are designed to provide a marketplace for people, particularly individuals without employer-sponsored insurance, to shop for and easily compare insurance plans.
Theoretically, the exchanges are a good idea, but in practice there have been a number of challenges. Primarily, the numerous requirements and restrictions placed on insurers have increased the cost of doing business. Secondly, enrollment has been lower than projected and those that did sign-up for coverage were less healthy than expected. As a result, many insurers have had to pay out more for medical claims than they have received in premium revenue. In 2014, 70 percent of insurers sustained losses which amounted to $2.7 billion; initial analyses of 2015 data suggest that loss margins have nearly doubled and only a quarter of insurers reported earning a profit.[i] Consequently, many insurers have exited the marketplace, leaving millions of consumers with fewer options to choose from.