Saturday, November 2, 2013

Insurance companies very worried about delay of the individual mandate...

Without the individual mandate, the whole house of cards collapses. To be honest, it's hard to feel sorry for insurance companies. They supported Obamacare. Having said that, it would be a disaster if the individual market collapsed.

Via The National Journal:
That tone is changing, though, in the wake of’s woes. Sen. Joe Manchin, D-W.Va., is working on a bipartisan bill to delay the individual mandate for a year, a move that has set off alarms inside the industry. “The individual mandate is inextricably linked to the insurance-market reforms included in the health care reform law,” said Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, the industry’s leading trade organization.
The health care law essentially strikes a deal with insurance companies: They are required to cover people with preexisting conditions, and they can’t charge people more based on those conditions. Both of those policies will cost insurers money—potentially, a lot of it. So the law also includes three tools to minimize their financial risks: the individual mandate; subsidies to help people afford insurance; and a defined window to buy coverage.
If lawmakers start fiddling with those incentives, the equation gets worse for insurers. There are minor changes that the industry could probably weather, maybe easily. But just the idea of weakening those safeguards is enough to make insurers nervous. A handful of states tried in the 1990s to enforce guaranteed coverage, but without the safeguards that Obamacare includes for insurers. Premiums in those states skyrocketed, growing by double digits each year until they were so expensive that the reforms ended up increasing the number of uninsured people.
Democrats protective of the Affordable Care Act have held the line so far on changes to its important provisions. The individual mandate might not be politically popular, but Obamacare won’t work without it, so the party was stuck with it. That put Democrats and insurers on the same team.

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