While the Affordable Care Act (Obama Care) has provided health insurance for many who could otherwise not afford it, the net result for health stocks and insurance companies has not been good. How bad is Obama care for the companies involved? Reuters just announced that health stocks helped pull the market lower.
U.S. stocks started the fourth quarter on a weak note as healthcare stocks fell and Deutsche Bank’s travails weighed on financials.
Merck and Johnson & Johnson both fell on the day. But a better measure of how bad Obama care is for health stocks are the number of health insurers leaving Obama Care. In Minnesota Obamacare rates are going up as regulators are allowing premium increases of 50% according to Bloomberg.
Minnesota will let the health insurers in its Obamacare market raise rates by at least 50 percent next year, after the individual market there came to the brink of collapse, the state’s commerce commissioner said Friday.
The increases range from 50 percent to 67 percent, Commissioner Mike Rothman’s office said in a statement. Rothman, who regulates the state’s insurers, is an appointee under Governor Mark Dayton, a Democrat. The rate hike follows increases for this year of 14 percent to 49 percent.
“It’s in an emergency situation – we worked hard and avoided a collapse.” Rothman said in a telephone interview. “It’s a stopgap for 2017.”
Blue Cross and Blue Shield of Minnesota is leaving the Obama Care exchanges due to losses and regulators are working hard to see that remaining insurers are not overwhelmed with too many patients and excessive losses.
Tailored Plan Quits
Harken Health Insurance is a startup launched early this year and affiliated with health care giant United Health Care. The company was specifically tailored to offer plans through the Affordable Care Act. According to Business Insider the company is already quitting Obamacare exchanges after less than a year.
Harken Health Insurance, a startup and part of UnitedHealthcare that offered low-cost health plans through the Affordable Care Act (ACA) exchanges, is leaving the marketplace.
Harken had been launched in early 2016 to create tailored plans that would make money in the ACA, better known as Obamacare exchanges.
UnitedHealthcare, the parent company, has also rolled back its offerings through the exchanges due to financial losses.
It should be noted at United Health Care invested a lot of time and money into how they would deal with and profit from the Affordable Care Act. It is a measure of how bad Obama care is for these companies that even the smartest of the bunch could not find a way to make money and continue offering services.
Change to Survive
The New York Times says Obama care will need to change to survive.
The fierce struggle to enact and carry out the Affordable Care Act was supposed to put an end to 75 years of fighting for a health care system to insure all Americans. Instead, the law’s troubles could make it just a way station on the road to another, more stable health care system, the shape of which could be determined on Election Day.
Seeing a lack of competition in many of the health law’s online insurance marketplaces, Hillary Clinton, President Obama and much of the Democratic Party are calling for more government, not less.
The departing president, the woman who seeks to replace him and nearly one-third of the Senate have endorsed a new government-sponsored health plan, the so-called public option, to give consumers an additional choice. A significant number of Democrats, for whom Senator Bernie Sanders spoke in the primaries, favor a single-payer arrangement, which could take the form of Medicare for all.
Considering that the government might just choose the “Bernie” option and nationalize health care this may be just the right time to get out of health stocks. Of course, after the shakeup the survivors will probably make money by selling private insurance to those who can afford it.