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Discussion in 'The War Room' started by Mark Hunts FIST, Aug 16, 2016.
So. Simply the cost of doing business.
"As a whole" <> in the ACA markets. Aetna is doing the same thing UHC is doing. They recognize that they are losing money and they project those losses will grow for marketplace plans, so they're willing to give up market share to become more profitable. Would they willingly give up market share for any reason other than that they are losing money? Here is an article from earlier this year about UHC doing the same thing.
"The smaller overall market size and shorter term, higher-risk profile within this market segment continue to suggest we cannot broadly serve it on an effective and sustained basis,” CEO Stephen Hemsley said in a conference call with investors Tuesday."
Ah okay. Seems like the other poster addressed it. But I think the larger point of "if you like it you can keep it" isn't happening because insurers and companies can be shitty. Not because the law invalidated certain plans.
Bullshit. It's too expensive for the companies to offer those plans.
Insurance companies just don't like selling individual plans. They're not as profitable.
Obamacare forces them to sell more individual plans and they don't like that.
Generally, if someone buys an individual plan with their own money, they're going to use it. Insurance companies don't want you using your health insurance they only want you to own a policy.
When more people are buying individual plans and using them, they make less money.
That's why individual/private insurance plans cost so much more than your typical employer provided benefits.
For small companies? Possibly. For multi national corporations, absolutely not.
The whole thing was dumb to begin with. Turnover in nongroup health insurance has always been very high (it's like one in five people who have the same one after three years--gotta double check that, but something like that). The ACA hasn't affected it either way, but Obama stepped in it so he's getting called on it.
Some context is that reformers had realized that the two major obstacles to reform of the healthcare system were that while most people recognized that the pre-ACA system was fucked up, most expressed satisfaction with their personal situations, and people didn't want a big tax increase. That's why single-payer could never get traction. So to work around that, they designed a pretty complicated system that provides many of the benefits of single-payer without huge tax hikes and without throwing people off their existing plans. So Obama was assuring people that the reforms were not going to throw them off plans that they were happy with (the ACA was designed to leave the group markets--employer-provided insurance, Medicare, and Medicaid--mostly alone and reform the completely broken individual markets, but there were people happy with their nongroup plans), but he fucked up the explanation and overpromised, making it sound like he was saying the ACA was going to eliminate turnover rather than just not create more of it.
Like Aetna and UHC you mean?
As already displayed in this thread, Aetna saw record profits that wouldn't be available them had it not been for the ACA. They want all the benefits with none of the risk and thats not how any (fair) business operates.
Their profits would have been higher had they not been in the markets serving ACA consumers. This is not difficult to understand. If those markets were profitable, we wouldn't be discussing the two largest health insurers in the country pulling out of the Marketplace.
And most businesses are in the business of maximizing profit and minimizing risk.
there's just no arguing with stupid.
>Claims they lost 430 million in certain markets.
Finds out they had a record year for profits.
>Claims that all businesses cut out segments of businesses that aren't profitable.
Presented with the fact that just a couple months ago they said that it would have cost more than 430 million to attract the customers it received which led to record profits.
>Doubles down that their profits would have been higher had they not been in the ACA markets.
Conclusion: You have a very elementary understanding of how large businesses in many markets and segments work.
Who claimed they lost 430MM in certain markets? Not me. Regardless, you do understand how it's possible that certain markets/channels may be more profitable than others, and that if those less profitable channels are projected to continue to operate at a loss it makes sense to stop the bleeding?
Can you demonstrate that the Aetna customers that are on the public exchanges are contributing positively toward their profitability?
BTW, the personal attacks are unwarranted, fuckface.
Interesting article from BBG.
Quote from the article:
"Aetna said earlier this year that it expected to lose $300 million on the plans. UnitedHealth Group Inc. and Humana Inc., which Aetna has agreed to buy for $37 billion, are also pulling out after posting hundreds of millions of dollars of losses."
ETA more from the article...
"Peter Costa, an analyst at Wells Fargo & Co., said the retreat is a smart financial move that could help avoid further losses.
“The exits are larger than we believe most expected, but we see this as a positive,” Costa, who rates the stock outperform, said in a note to investors. “We see the exits as the most predictably effective way to bring the book to break-even.”
Ana Gupte, an analyst at Leerink Partners, estimated that Aetna’s exits will boost next year’s earnings by about $200 million.
Aetna’s shares gained less than 1 percent to $120 at 8:48 a.m. in New York, before the markets opened. Through Monday, they had risen 10 percent, topping the 7.2 percent gain in the Standard & Poor’s 500 Index."
Seems Wall Street approves of Aetna's decision.
I'm aware United and others have done the same thing. People are blaming the ACA when it is simply Insurance companies looking to increase their profits.
Insurance companies are just waiting until people start getting older and use more of their ACA benefits. Then they will all pull out.
By getting out of the exchanges you mean?
Aetna represents less than 1% of people insured through the exchanges. I haven't looked up Humana or UHG.
And interesting question is does this create the breeding ground for a new private market approach to healthcare and what will that look like?
Yes, increase their profits by getting out of the exchanges.
cost of acquisition vs cost of policy are different.
the cost of the acquisition is a immediate one-time expense it doesn't continue.. The losses would continue. so yes the first quarter may be comparable to the acquisition costs but what about the 2nd quarter 3rd quarter 4th quarter next year the year after the year after that and so forth and so on