Health insurance companies express worry over profits

health insurance companies profits

Health insurance providers predict impact to profits

Despite the partial shutdown of the U.S. federal government, the Affordable Care Act will continue to be enacted on schedule. This has created some worry among some health insurance companies and their ability to make a profit. Large companies have warned since 2010 that the federal health care law would cause a spike in health insurance rates due to provisions calling for higher expenditure on administration and requirements for insurers to spend the majority of the money they collect through premiums on improving medical care and services.

Insurers make moves to mitigate effects of federal law

The costs that health insurance companies expect to accrue through the implementation of the Affordable Care Act could eat a significant hole into their profits. As such, many companies are taking steps to distance themselves from some aspects of the federal law in an effort to mitigate its financial impact. Aetna, for instance, has opted not to participate in health insurance exchanges in three states, citing pricing concerns and problematic regulations. In Connecticut, only three insurance providers remain in the state’s exchange, with the majority of insurers opting to offer coverage through traditional channels.

health insurance company profitsCompanies claim provisions of health care law are not fully understood by consumers

Aetna did not simply pull out of health insurance exchanges because it was told it could not charge certain rates for coverage. The move was calculated and involved a great deal of examination of the market and how it could be affected by the Affordable Care Act. Many insurers suggest that the provisions of the law are not well known to consumers and that many people do not understand the costs that insurers will face due to new regulations and standards from the federal government. These provisions could cause health insurance providers to cut back on the benefits they offer through certain plans as smaller companies could be forced to lay off staff.

Exchanges prove quite popular

The ultimate impact of the Affordable Care Act is not likely to be known for some time. Health insurance exchanges have only just begun open enrollment and tens of millions of people throughout the U.S. have been flocking to exchange websites in order to purchase coverage. The traffic has proven to be so high for these sites that many of the exchange websites have had to be upgraded to handle additional capacity.

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