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    As insurers leave Obamacare exchanges, doctors pay the price

    Major insurers are no longer sure if they can afford to participate in the Affordable Care Act's (Obamacare) insurance exchanges. That's making the White House nervous.

    In late March, the Obama administration met with insurance industry representatives in what was officially billed as an effort to fix Obamacare's "risk adjustment" program, which is supposed to compensate insurers who take heavy losses by covering higher-risk patients.

     

    Related: Donald Trump unveils seven-point healthcare reform plan

     

    The administration's charm offensive is likely the result of announcements by UnitedHealth, Aetna, Cigna, several Blue Cross Blue Shield affiliates and Humana that they'd consider quitting the exchanges next year. 

    The exit of those carriers would be bad for consumers and doctors. But even if the administration manages to keep them in the fold, Obamacare is reshaping the healthcare landscape in other ways that undermine the interests of America's physicians.

    Insurers have lost a lot of money on the exchanges. UnitedHealth pegged its loss at more than $720 million last year. It's going to exit the markets in Michigan, Georgia and Arkansas, effective next year.

    Anthem said that losses on Obamacare plans caused its profits to fall 64% in the last quarter of 2015.

    Blue Cross Blue Shield plans haven't fared much better. Fitch Ratings found that 23 of 35 BCBS companies reported $1.9 billion in lost earnings. Sixteen had a net loss. Health Care Service Corp., which owns Blue Cross affiliates in Illinois and four other states, lost $1.5 billion on its individual insurance business in 2015—nearly twice as much as the $767 million it lost in 2014.

     

    Further reading: Silicon Valley's vision to transform healthcare

     

    Meanwhile, 12 of the 23 non-profit insurance Consumer Operated and Oriented Plans (Co-Ops) started by Obamacare have failed. That's forced hundreds of thousands of people to secure coverage elsewhere. Eight of the 11 remaining are under "enhanced oversight" or undergoing federally-mandated "corrective action plans." Should they fail also, consumers will have even fewer insurance choices. 

    The acting administrator of the Centers for Medicare & Medicaid Services, Andy Slavitt, said in late February that he supported loosening capital rules to allow private insurers to become part owners of Co-Ops that have survived. But who would want to invest in a venture that appears doomed to fail?

    Next: Payer landscape changing

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    • Anonymous
      As if we could not see this coming. Government (corrupt idiots) shakes hands with insurance companies (corrupt administridiots) on behalf of providers (sacrificial lambs) opens the floodgates for people that have not received routine care and preventative services for - oh on average (not evidence based) 30-40 years - then wonders why it all falls apart because the Government under financed the entire plan to the Insurance companies (who were all to happy to sign on to get the free government money - until it all back fired and the flood of people actually utilized their "benefits"). All the while providers who thought this might actually be something more than government diverting money that should go to provide care -- to the big business insurance companies. We would love to provide care to these people, but ahem -- may need to actually pay their employees in order to stay in practice. But oops forgot that part - providers might actually have to fund their own existence. Alas -- did anyone see this coming -- aside from me - a poor pitiful independent provider getting shafted by the "big business" of medicine that seems to include paying out to everything and everyone EXCEPT those that actually do the work of providing care.. Just a few thoughts..

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