First Insurance Data Shows Insurance Company Profiting From Obamacare

Conservatives opposed to the Affordable Care Act have over-emphasized the initial start-up problems with the exchanges, making false projections that Obamacare will fail. That appears highly unlikely. We are seeing many people obtain health coverage who have not been able to obtain coverage in the past, and the number is expected to grow as we get closer to the sign-up deadlines. Insurance companies can no longer drop people due to developing medical problems. Insurance plans now cover preventative studies which they did not cover before, and plans which took premiums without providing real medical coverage are being eliminated. All this can be counted as successes for Obamacare.

The Affordable Care Act is also likely to result in larger profits for insurance companies due to the increase in business. So far we have limited data on plans sold, but today information released by WellPoint demonstrates that insurance companies are likely to see the predicted increase in profits:

The biggest player in the Affordable Care Act’s online insurance marketplaces delivered encouraging news to Obamacare supporters Wednesday.

After weeks of uncertainty about how many people have been applying for coverage that started Jan. 1, their age spread and whether or not they’re paying premiums, WellPoint disclosed higher-than-expected early membership growth and said it expects to make money on the new enrollees. It’s the most substantial information so far on how a key part of the health law is working out.

“We do feel good about what we’ve seen thus far on the exchanges,” WellPoint CEO Joseph Swedish told stock analysts on a conference call to report 2013 financial results. “While it is early, we are encouraged by the level of applications we’ve received” as well as by the health-risk profiles of new members, he said.

WellPoint bosses also disclosed:

  • As of last week about 500,000 people had applied for individual policies, mostly through its Anthem Blue Cross plans. The company expects another surge in late March, when enrollment closes for most people.
  • Most are new members, not customers rolling over previous WellPoint insurance. What WellPoint doesn’t know is if they were previously uninsured or had coverage somewhere else.
  • More than four-fifths applied through the subsidized, often-troubled online portals run by states or the federal government. The others enrolled directly with the company.
  • Thanks to computer troubles, WellPoint is still processing applications this week for coverage effective Jan. 1.
  • Most applicants had paid the first month’s premium, “but we’re not at what I’ll call a vast majority yet,” said chief financial officer Wayne DeVeydt.
  • New members are older on average than the general population but not more so than expected. WellPoint priced its plans anticipating an older and presumably sicker mix, executives said.

In related news:

Mitch McConnell might be vulnerable in Kentucky over his opposition to the Affordable Care Act.

Ezekiel J. Emanuel explained how the Republican proposal for health care provides less benefits, increase the chances of people being denied coverage for pre-existing conditions, will lead to higher taxes for those receiving insurance through employers, and will lead to higher costs for buying their own coverage. On the other hand, from the Republican perspective, it isn’t Obamacare (although it copies many features from it).

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6 Comments

  1. 1
    David Duff says:

    Well if WellPoint are representative of the whole industry then that’s bad news for the ‘Lefties’.  They actually *want* the health insurance industry to fail so they can nationalise it!
     
    But off topic, I am the bearer of good news, well, good for you, anyway!  It comes from an unusual source – and at this point, Ron, I must ask you to brace yourself – Ann Coulter!  You must ‘man up’, I think you say ‘over there’, don your bio-chem warfare suit and holding your nose visit this:
    http://www.anncoulter.com/columns/2014-01-29.html
     
    We bid farewell to America as it and the sun sinks in the west!
     

  2. 2
    Ron Chusid says:

    Where do you get your absurd ideas about what “lefties” want? Ann Coulter (who you admit you read)?

    There is zilch support for nationalization of the insurance or any other industry in this country. The Democrats wrote the Affordable Care Act in a manner which makes it impossible for the insurance companies to fail. They should profit from Obamacare and if they don’t there are financial protections for companies which wind up with a riskier pool than anticipated. (Ironically it is the Republicans who are now pushing to repeal these protections for the insurance industry).

    The most common view on the left is that a single-payer plan would have been preferable–either Medicare For All or a new plan modeled on Medicare. Even this is not the nationalization of the health insurance industry. Under Medicare insurance companies are used as intermediaries (as private companies) to administer payments and this would be extremely disruptive to the health insurance industry, but nothing is nationalized. Private insurance companies also would presumably continue their same role in selling private plans to Medicare recipients in the Medicare Advantage program.

    There is also little desire on the left for the ACA to fail. I have seen some desire for this based upon a hope that it might be replaced by a single-payer plan, but this is both a rare position and does not include any desire to nationalize the health insurance industry. It is more commonly believed on the left that the failure of Obamacare would make it more difficult to pass a single-payer plan. I think it might happen eventually if we were somehow returned to the pre-ACA situation as the individual market was collapsing and there would be increased demand over time for the government to act.

    All sorts of things are advocated on some far-left blogs. You probably can find someone calling for nationalization, but the far-left in general has the support of at most only 1-2% of the population (no matter how much people like Ann Coulter want to extend their beliefs to the entire left). Even among them, I have only seen interest in nationalization in a small number of this tiny minority. Nationalization is just not something which hardly anyone in the United States has interest in.

    The real threat to capitalism in the United States comes from the Republicans. As long as we can keep their influence down, you are premature in bidding farewell to America.

  3. 3
    David Duff says:

    Well, as far as the ACA goes lets agree to differ but you really must read the Ann Coulter link – I promise you it will be music to your ears – and sad to say I think she may be right!

  4. 4
    Ron Chusid says:

    Nothing new or there. Not surprisingly Coulter has a very narrow view of the situation. She sees immigrants as cheap labor but ignores the economic advantages both from more people working and paying taxes, and from the benefits of businesses started by better educated immigrants. To Coulter, immigrants are primarily low paid gardeners. She also ignores the political reality that the Republicans have little choice. They have benefited over the years primarily from the Southern Strategy (as it is more politely put) and instilling racial fears. Now the demographics are changing and there aren’t enough low-information white males who provide most of their votes. If they continue to promote xenophobia and racism, they reduce their chances of getting votes from other groups. They lose if they oppose changes in immigration, while they also can lose if they let in more people who will vote against them. Well deserved payback for their past reliance in racism.

  5. 5
    David Duff says:

    Well, they are “cheap labour”!  But more important they are cheap labour who are going to vote Democrat for decades to come – I was going to say until they grow up but that would be snarky!
    And if I may remind you, up until very recent times it was always the Democrat party that fought for entrenched racism!

  6. 6
    Ron Chusid says:

    Some immigrants are cheap labor, but that is a pretty narrow look at them. There are also many Asian immigrants who are starting high tech firms. They also vote Democratic. There are also many in between the stereotypical Mexican gardener and the Asian tech entrepreneur.

    In the past there were Southern Democrats who fought for entrenched racism. They have moved to the Republican Party. It is rather dishonest to suggest that the current Democratic Party is tainted by this racism, as many conservatives do.

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