Sunday, December 29, 2013

No Bailout For The Insurance Industry

Health insurers loved Obamacare. They saw tens of millions of new customers being forced to purchase their product. Who wouldn't want that?

But as things appear to be shaking out, the customers they need, the young and the healthy, are not cooperating, leaving the insurance companies stuck with the old and the sick, whose premiums will not cover their expenses.

The insurance companies will soon be presenting the federal government with a huge bill. Should we pay it?

No.
The Affordable Care Act will push the over 45 million uninsured in the United States to find health care coverage. The largest portion of this group will find coverage through the health insurance marketplaces set up by the state and federal exchanges. Consumers purchasing through the exchanges will receive coverage through private insurance companies, with many receiving federal tax credits to help pay for policies. While the consumer may not be paying the full price of the policy, the insurance companies will still receive the full premium. With millions mandated to receive coverage, how much are the currently uninsured worth to the health insurance industry?
To answer this question we looked at what the uninsured would pay in monthly premiums for coverage with private insurers. (See our methodology below) Based on our estimates the uninsured are worth a potential 92+ billion dollars in annual premiums to the insurance companies. The Affordable Care Act requires that 80% of the value of the premiums be used to service health care costs, leaving a little over 18.4 billion dollars to be spread accross employees, marketing, overhead and profits. Insurance companies we've looked at could expect anywhere from 2-4% of all premiums to come in the form of profits. This would amount to $1.8 - $3.6 billion dollars annually. 
- See more at: http://www.valuepenguin.com/2013/12/how-much-obamacare-worth-insurance-companies#sthash.WDA4Gd5i.dpuf
The Affordable Care Act will push the over 45 million uninsured in the United States to find health care coverage. The largest portion of this group will find coverage through the health insurance marketplaces set up by the state and federal exchanges. Consumers purchasing through the exchanges will receive coverage through private insurance companies, with many receiving federal tax credits to help pay for policies. While the consumer may not be paying the full price of the policy, the insurance companies will still receive the full premium. With millions mandated to receive coverage, how much are the currently uninsured worth to the health insurance industry?
To answer this question we looked at what the uninsured would pay in monthly premiums for coverage with private insurers. (See our methodology below) Based on our estimates the uninsured are worth a potential 92+ billion dollars in annual premiums to the insurance companies. The Affordable Care Act requires that 80% of the value of the premiums be used to service health care costs, leaving a little over 18.4 billion dollars to be spread accross employees, marketing, overhead and profits. Insurance companies we've looked at could expect anywhere from 2-4% of all premiums to come in the form of profits. This would amount to $1.8 - $3.6 billion dollars annually. 
- See more at: http://www.valuepenguin.com/2013/12/how-much-obamacare-worth-insurance-companies#sthash.WDA4Gd5i.dpuf

The Affordable Care Act will push the over 45 million uninsured in the United States to find health care coverage. The largest portion of this group will find coverage through the health insurance marketplaces set up by the state and federal exchanges. Consumers purchasing through the exchanges will receive coverage through private insurance companies, with many receiving federal tax credits to help pay for policies. While the consumer may not be paying the full price of the policy, the insurance companies will still receive the full premium. With millions mandated to receive coverage, how much are the currently uninsured worth to the health insurance industry?

To answer this question we looked at what the uninsured would pay in monthly premiums for coverage with private insurers. (See our methodology below) Based on our estimates the uninsured are worth a potential 92+ billion dollars in annual premiums to the insurance companies. The Affordable Care Act requires that 80% of the value of the premiums be used to service health care costs, leaving a little over 18.4 billion dollars to be spread accross employees, marketing, overhead and profits. Insurance companies we've looked at could expect anywhere from 2-4% of all premiums to come in the form of profits. This would amount to $1.8 - $3.6 billion dollars annually. 

The Affordable Care Act will push the over 45 million uninsured in the United States to find health care coverage. The largest portion of this group will find coverage through the health insurance marketplaces set up by the state and federal exchanges. Consumers purchasing through the exchanges will receive coverage through private insurance companies, with many receiving federal tax credits to help pay for policies. While the consumer may not be paying the full price of the policy, the insurance companies will still receive the full premium. With millions mandated to receive coverage, how much are the currently uninsured worth to the health insurance industry?
To answer this question we looked at what the uninsured would pay in monthly premiums for coverage with private insurers. (See our methodology below) Based on our estimates the uninsured are worth a potential 92+ billion dollars in annual premiums to the insurance companies. The Affordable Care Act requires that 80% of the value of the premiums be used to service health care costs, leaving a little over 18.4 billion dollars to be spread accross employees, marketing, overhead and profits. Insurance companies we've looked at could expect anywhere from 2-4% of all premiums to come in the form of profits. This would amount to $1.8 - $3.6 billion dollars annually. 
- See more at: http://www.valuepenguin.com/2013/12/how-much-obamacare-worth-insurance-companies#sthash.WDA4Gd5i.dpuf
The Affordable Care Act will push the over 45 million uninsured in the United States to find health care coverage. The largest portion of this group will find coverage through the health insurance marketplaces set up by the state and federal exchanges. Consumers purchasing through the exchanges will receive coverage through private insurance companies, with many receiving federal tax credits to help pay for policies. While the consumer may not be paying the full price of the policy, the insurance companies will still receive the full premium. With millions mandated to receive coverage, how much are the currently uninsured worth to the health insurance industry?
To answer this question we looked at what the uninsured would pay in monthly premiums for coverage with private insurers. (See our methodology below) Based on our estimates the uninsured are worth a potential 92+ billion dollars in annual premiums to the insurance companies. The Affordable Care Act requires that 80% of the value of the premiums be used to service health care costs, leaving a little over 18.4 billion dollars to be spread accross employees, marketing, overhead and profits. Insurance companies we've looked at could expect anywhere from 2-4% of all premiums to come in the form of profits. This would amount to $1.8 - $3.6 billion dollars annually. 
- See more at: http://www.valuepenguin.com/2013/12/how-much-obamacare-worth-insurance-companies#sthash.WDA4Gd5i.dpuf
The Affordable Care Act will push the over 45 million uninsured in the United States to find health care coverage. The largest portion of this group will find coverage through the health insurance marketplaces set up by the state and federal exchanges. Consumers purchasing through the exchanges will receive coverage through private insurance companies, with many receiving federal tax credits to help pay for policies. While the consumer may not be paying the full price of the policy, the insurance companies will still receive the full premium. With millions mandated to receive coverage, how much are the currently uninsured worth to the health insurance industry?
To answer this question we looked at what the uninsured would pay in monthly premiums for coverage with private insurers. (See our methodology below) Based on our estimates the uninsured are worth a potential 92+ billion dollars in annual premiums to the insurance companies. The Affordable Care Act requires that 80% of the value of the premiums be used to service health care costs, leaving a little over 18.4 billion dollars to be spread accross employees, marketing, overhead and profits. Insurance companies we've looked at could expect anywhere from 2-4% of all premiums to come in the form of profits. This would amount to $1.8 - $3.6 billion dollars annually. 
- See more at: http://www.valuepenguin.com/2013/12/how-much-obamacare-worth-insurance-companies#sthash.WDA4Gd5i.dpuf

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