The third year of Obamacare open enrollment began on November 1 and with recent news about the program, you have to wonder if there will be a fourth.
More than half of the non-profit state insurance co-ops have gone belly up. Premiums have shot up double digits. And the fund that is supposed to reimburse insurance companies for their losses is massively underfunded, according to Standard and Poors.
Under the so-called “risk corridor” program, the Obama administration charges insurers with more-than-expected profits and redistributes the money to plans with losses.
In the first two years of the healthcare law, more insurers than expected have ended up with balance sheets in the red. As a result, the risk pool now has only about $1 to cover every $10 in claims – an equation that is not likely to improve until the market stabilizes.
“We estimate that that the 2015 ACA risk corridor will be significantly underfunded, as was the case the previous year,” Standard and Poor’s analyst Deep Banerjee predicted in a report Thursday.