Wednesday, September 17, 2014


The 2015 Obamacare open enrollment is less than 2 months away and already some carriers
have cold feet and are ready to bail.

With less than 4 months of credible claim data to work with the "Blue Ox" of Minnesota is pulling the plug.
PreferredOne, the insurer that sold nearly 60 percent of all private health plans on Minnesota's Obamacare exchange, on Tuesday said it would leave that marketplace. PreferredOne's plans were the lowest-cost options on that exchange, known as MNSure.
PreferredOne cited the costs of doing business on MNSure as the reason for its surprising decision, saying that selling plans is "not administratively and financially sustainable going forward,"
Well duh!
For those who came in late to class, under Obamacare insurance carriers
  • abandon almost 100 years of risk model pricing
  • are told what is to be covered
  • are told who is to be covered (anyone who can fog a mirror)
  • have pricing margins dictated by DC
  • if rates are deemed too high (arbitrarily, no guidelines of course) are required to back down
  • are prevented from asking health questions other than tobacco use
  • must apply community, unisex rating models with strict 3:1 age banding
In other words, the rocket surgeons in Congress have written a law about a topic they clearly do not understand and passed a law under cover of darkness that was never read before counting the (party line) votes.

What could possibly go wrong?


But enough about them. What possessed a new carrier (provider-owned, no less) to jump into a market without any practical experience or firsthand knowledge regarding day-to-day management?

Probably the same thought process used by those who voted for a one term Senator who lacked real world experience and had the thinnest resume' of any prior presidential candidate.

PreferredOne's relatively low-priced plans on MNSure for the 2014 enrollment season were a big reason why 59 percent of the 47,902 people who bought health coverage on the exchange by mid-April selected the insurer.
Those customers now face the prospects of higher rates if they want to remain in those same plans next year, as is their option, while existing customers of other insurers and new customers in the market will have fewer price options from which to choose.
Any fool can write to gain market share by offering the lowest price.
Who will be the next carrier to bail?
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