Jerosen - thanks for the thoughtful reply. On the adverse selection front, there are two factors - positive and negative. On one hand, anyone who’s generally unhealthy gets a good deal from the ACA indivdiual market and presumably will sign up. On the other hand, those who are relatively healthy may not bother since they find it a poor value (and pay a penalty, or find an excuse, or whatever). Both factors contribute to a riskier and more expensive insurance pool.
Here are some stats on the major insurers and how the Obamacare markets have treated their shareholders… poorly. Mind you the overall insurance business is quite profitable (group plans, life insurance, etc), but the obamacare underwriting business has been an unmitigated disaster for almost all the majors. They also cite unexpectedly high costs, indicating that the risk pool is indeed more toxic than they expected (or else they would have made a profit presumably). The one exception is the Medicaid companies selling similar plans to the bottom of the income pool - very narrow, cheap clinic plans that are very cheap to run and have no adverse selection since they cater to people so poor their plans are essentially free to the customer after subsidies and CSRs.
The company said it expects to lose more than $200 million in its individual business line this year, on top of nearly $700 million in losses between 2014 and 2016. Aetna withdrew from 11 of its 15 markets for 2017. It has 255,000 Obamacare policyholders this year, down from 964,000 at the end of last year.
These customers, however, continue to be costlier than the company expected, Aetna said during its earnings call earlier this month. It had to set aside an additional $110 million to cover larger-than-projected losses for this year.
United:
https://archive.is/AjVGm
UnitedHealth Group lost more than $720 million on its public exchange business last year and United is a small player in this market…
BC/BS:
https://www.investors.com/politics/editorials/obamacare-is-killing-the-blues/
For example, Health Care Services Corp. – which owns Blue Cross affiliates in Illinois, Montana, New Mexico, Oklahoma and Texas – lost $1.5 billion on its ObamaCare-compliant plans last year.
The Blue Cross Blue Shield Association released a widely publicized report last month that said new enrollees under ObamaCare had 22 percent higher medical costs than people who received coverage through their employers.
Anthem - better than most
https://www.wsj.com/articles/anthem-raises-outlook-reiterates-cigna-purchase-plans-1469617063?mg=prod/accounts-wsj
Anthem Inc. said it is now projecting losses on its Affordable Care Act plans this year, a turnaround for a major insurer that had maintained a relatively optimistic tone about that business. Anthem said it now believed it would see a “mid-single-digit” operating margin loss on its ACA plans in 2016, due to higher-than-expected medical costs. It expects better results next year, because it is seeking substantial premium increases.
Centene - selling Medicaid style plans to poor people is good business