Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Bad News for Obamacare Insurers: Will Premiums Spike in 2015?

One well-publicized tactic insurers have used to reduce costs in the Obamacare public exchanges is "network narrowing," by which insurers contract with fewer health care providers for health plans. However, a new draft letter from the Centers for Medicare & Medicaid Services (CMS) indicates that the government will crack down on this practice in 2015. Insurers will be required to include 30% of essential community providers (or ECPs) in their network, thereby establishing a floor for consumers looking for choice in doctors and hospitals.

While this may be good news for consumers from a choice standpoint, insurers will have to find other areas of potential cost savings or raise premiums. And this has been a low-margin business thus far, with insurers generally predicting either a narrow loss or a narrow profit. Some have threatened to substantially raise premiums in 2015, with Aetna's (NYSE: AET  ) CEO, Mark Bertolini, claiming that insurance rates in some markets could double next year.

With 2014 open enrollment in the exchanges about to end, and premium rates for 2015 soon to be released, what will this news mean for insurers, investors, and consumers? Will insurers make money on the public exchanges and participate again in 2015? And how will this affect your investments? Check in below, where Motley Fool health care analysts David Williamson and Michael Douglass consider the state of play with eight days left in Obamacare open enrollment.

We're in the final sprint on the Obamacare exchanges -- learn everything you need to know quickly!
Obamacare seems complex, but it doesn't have to be. In only minutes, you can learn the critical facts you need to know in a special free report called "Everything You Need to Know About Obamacare." This FREE guide contains the key information and money-making advice that every American must know. Please click here to access your free copy.

Read/Post Comments (5) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 23, 2014, at 12:18 PM, fredjohnson55343 wrote:

    This isn't "bad news for Obamacare Insurers". It's bad news for Obamacare buyers.

  • Report this Comment On March 23, 2014, at 3:48 PM, jaxkitten wrote:

    Gosh, another conservative rant about Obamacare. As surely as the rooster crows at dawn you're got wingnuts spewing against the new health care law. Have we seen their health care proposal? LOL.

  • Report this Comment On March 23, 2014, at 4:50 PM, Ardadius wrote:

    "Bad news for obamacare insurers"? No, bad news for obamacare. Motley Fool has been shilling for this doomed program from day one, and now the chickens are coming home to roost.

  • Report this Comment On March 24, 2014, at 12:59 AM, HappyCustomer wrote:

    This program has been sold as being the "affordable" care act. To me the biggest thing that it's had to offer has been coverage for the people who couldn't get coverage. That doesn't make it affordable.

    Then we get handed "facts" from people on both sides of the issue with agendas that are questionable at best and just dishonest at worst.

    Now I don't hate Obama and I'm not scared of the government, but I have not and unless I am proven to be in error....will not be in favor of Obamacare.

    The reason?

    Because if you roll out a program of this scale there should absolutely be no unknowns. How many people have no idea how much their coverage is unless they enroll? How many people have significantly different payments based on geography, income, day of the week, etc.?

    Bottom line is that I do think that there is a lot of misinformation out there, but that's because there has been and continues to be a lack of verifiable information to the public. The math has never added up on this.

    We all know that the system we had wasn't sustainable as it was. It wasn't smart and it's just getting worse. The government has been paying more and more for health care and that's partly because of the people, but it's mainly because we're paying ridiculous prices for care.

    What I would love to see is how the move to ACA impacts government spending on health related benefits though. I mean if we have a larger pool of people paying to me that should decrease the government's part. Even with subsidies and tax credits there should be a reduction. I haven't heard a peep about that. Of course even if I did could I trust it?

  • Report this Comment On March 25, 2014, at 4:32 PM, levelplayinfield wrote:

    We have a totally deceitful program sold to the American public and everytime a lie turns up or a mandate made to adjust the law ( as voted on) along with more deferrals to the implementation, we are told it is a work in progress and that it will take years to fix it. It was a lie from the beginning. THe only ones that believe anything from the party responsible for this debacle are the ones willingly drinking the kool-aid

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2886438, ~/Articles/ArticleHandler.aspx, 8/30/2015 10:56:10 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Michael Douglass

As the Motley Fool's Health Care Editor/Analyst, I focus on all things health care -- although my greatest interest is in the megatrends reshaping the American health care system, including the Affordable Care Act, Accountable Care Organizations, a shifting regulatory landscape, and the new drug discoveries fundamentally changing disease management and treatment.

Today's Market

updated 2 days ago Sponsored by:
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 1.21 0.06%
NASD 4,828.33 15.62 0.32%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/28/2015 4:00 PM
AET $116.86 Down -0.92 -0.78%
Aetna, Inc. CAPS Rating: ****
CI $137.87 Down -0.43 -0.31%
Cigna Corporation CAPS Rating: ****
HUM $184.01 Down -0.80 -0.43%
Humana, Inc. CAPS Rating: ****
UNH $117.28 Down -0.49 -0.42%
UnitedHealth Group CAPS Rating: *****