CNN Money published a piece Monday titled “3 measures of Obamacare’s success.” Not surprisingly the author overlooks a lot of contradictory information in order to praise the law.
The first piece of good news, according to CNN Money, is that insurers are happy with how things look. The story quotes Ken Goulet of Wellpoint telling investors “I’m very optimistic as to where we are.” Wellpoint is a big insurer so there’s no doubt Goulet’s opinion matters. But CNN Money is leaving out some important information.
Goulet may be optimistic but all that means is that his company, and many others, will be able to adjust to the new system and still make a profit. How will they adjust? Two weeks ago WellPoint’s Ken Goulet told investors “Looking at the rate increases on a year-over-year basis on our exchanges, and it will vary by carrier, but all of them will probably be in double digit plus.” That’s apparently despite the risk corridor and reinsurance programs which are designed to keep rate increases to a minimum in the first three years.
A couple days earlier an unnamed insurance executive told The Hill that executives were shocked when HHS Secretary Sebelius predicted modest rate increases next year during testimony before Congress. The executive said the consensus inside the industry is that rates are going up sharply. He expected his company to triple rates before the market re-opens in November.