Big insurers still feeling mighty wary of ObamaCare exchanges

The Obama administration is working frantically to persuade the younger and healthier people that they need to pay for the costs of care for the older, sicker people with more health-care needs — i.e., the people much more likely to join the program, especially at its outset — to sign up for ObamaCare en masse. Without lots of relatively low-maintenance individuals to balance out these riskier insurance pools, things are likely to get a heck of a lot more expensive — and, predictably, at least several major insurance companies have some major trepidation over the exact same thing.

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California and Washington, for instance — two of the states that have made some of the biggest investments in readying their ObamaCare exchanges for the October 1st grand opening — have had difficulties enticing insurance companies into participating in their exchanges meant to help insure individuals and small businesses, even with the promise of the proffered federal subsidies for lower-income individuals. Such pedestrian, ignoble concerns as actually turning a profit don’t much trouble the collective mind of the Obama administration, but for businesses voluntarily providing a valuable service to consumers in the marketplace, they’re kind of a big deal. Given the uncertainty over how the law’s initial active phases are going to pan out, several large insurance are hanging back, via the Financial Times:

Some big US health insurers, including Cigna, Aetna and UnitedHealthcare, are steering clear of most of the new state healthcare exchanges amid uncertainty about the kinds of customers they might attract: namely sick ones. …

But healthcare policy experts and analysts say that the decision also reflects uncertainty about whether the exchanges will be profitable, given how little is known about who will sign up to buy insurance on the new exchanges. …

A spokesman for Cigna, which is participating in five of 50 new exchanges, agreed that the provisions would help the company manage risk.

But he added of the general sense of uncertainty: “Our view is that Christmas is coming. We’ve made our list, but we still don’t know what we are going to find under the tree on Christmas day.”

UnitedHealthcare said it would participate in about 12 exchanges initially, but said the exchanges had the “potential to be a growth market” over time.

A spokesman for Aetna said it would participate in up to 14 exchanges. It emphasised that it planned to position itself “for the future”.

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Which people and how many people sign up for ObamaCare in the first year or so is still a fairly open question, and until these insurance companies can better calculate the costs and benefits of getting involved, they’re waiting it out — but I think Democrats can almost certainly forget about any of the much-desired smooth sailing leading up to the 2014 midterms.

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