"Insurance Companies Are Optimistic About Obamacare: ‘We’re All-In, And We’re Happy We Are’"
CREDIT: AP Photo/Jon Elswick
Obamacare opponents have made some pretty bold claims about the negative effect the Affordable Care Act will have on America’s health industry.
Medicare will “essentially collapse,” warned former GOP presidential candidate Rep. Michele Bachmann (R-MN) in 2011. “There will be no insurance industry left in three years,” predicted Sen. Tom Coburn (R-OK) during a 2010 town hall.
But actual insurance industry leaders have been singing a very different tune at the JP Morgan health care conference currently taking place in San Francisco. Many insurance executives are predicting that the Obamacare marketplaces will be a robust and growing segment of the U.S. health care industry despite Healthcare.gov’s botched rollout, and saying that the age and health demographics of those who have already enrolled in new ACA plans are on track with their expectations.
“Despite the near-term uncertainty, we believe exchanges will be growing as a big part of the market over time,” WellPoint Inc. CEO Joseph Swedish told conference attendees on Tuesday. “We are more focused on the end game of exchanges than the twists and turns in the near term.”
Swedish also believes that enrollment will continue to surge over the next three months. “We saw a sizable uptick at the end of December, concurrent with the first enrollment deadline, and we expect a similar bump in March, in front of the second primary enrollment deadline.” The Obama administration recently reported that about 2.2 million Americans have enrolled in plans through state and federal Obamacare marketplaces.
Insurer Health Net is particularly pleased by West Coast enrollment in the marketplaces, according to Modern Healthcare. “I think we now feel we’re all-in, and we’re happy we are,” said Health Net President and CEO Jay Gellert. “We believe that this population will continue to grow. It’s working in California, and it’s working in the West, and I think it will be an example for the rest of the country.”
The Washington Post’s Sarah Kliff, who has been tweeting live from the JP Morgan conference, noted that even insurers who expect to lose money in Obamacare’s first year are confident the marketplaces will lure more and more consumers, and become more profitable, down the line. “It’s still the early innings,” said Cigna CEO David Cordani.
Insurance company leaders are also brushing aside concerns that not enough young and healthy people have been enrolling in marketplace plans.
Many insurers actually set their 2014 Obamacare rates under the assumption that a disproportionate number of older, sicker, and medically costly people would flock to the marketplaces in the law’s nascent years. Enrollment data released on Monday tentatively confirmed those suspicions. About one in four adults who signed up for plans were aged 19 to 34 — and therefore, the assumption goes, more likely to be healthy and less expensive to cover — while approximately 33 percent were 55 or older (although there are indications that youth enrollment is accelerating at a faster pace than general enrollment).
That mix “is not out of whack with our expectations,” said Wellpoint Inc. CFO Wayne DeVeydt on Tuesday. Aetna CEO Mark Bertolini went one step further when addressing the demographics on Wednesday. “I’m not alarmed,” he said. “They’re better than I thought they would have been.”