More on the Death Spiral: Insurers Are Dropping Their Sickest Enrollees

Florida Blue, for example, is terminating about 300,000 policies, about 80 percent of its individual policies in the state. Kaiser Permanente in California has sent notices to 160,000 people — about half of its individual business in the state.  Insurer Highmark in Pittsburgh is dropping about 20 percent of its individual market customers, while Independence Blue Cross, the major insurer in Philadelphia, is dropping about 45 percent.

Both Independence and Highmark are cancelling so-called “guaranteed issue” policies, which had been sold to customers who had pre-existing medical conditions when they signed up. Policyholders with regular policies because they did not have health problems will be given an option to extend their coverage through next year.

More from Anna Gorman and Julie Appleby. See our previous post.

Comments (16)

Trackback URL | Comments RSS Feed

  1. PJ says:

    “80 percent of its individual policies in the state”

    That is devastating.

  2. Vincent G. says:

    The risk pool is getting ‘riskier’ by the minute.

  3. JD says:

    Who’s going to pick up the slack? The government. This is going to force the sickest onto public doles, costing us a fortune.

  4. Perry says:

    “You can keep your plan if you have one and your doctor” ——NOT!

  5. Bob Hertz says:

    The individual market has been the least profitable segment for most insurers for years.

    The large companies make most of their profits from Medicare Advantage. Those half hour TV ads are not cheap.

    The individual market probably has more complaints, more billing problems, and more volatile claims results than other segments.

    The new rules on Maximum Loss Ratios may in fact make it impossible to make money on individual insurance.

    I think that the president of Aetna said in late 2012 that the private insurance market is over. Here is maybe the canary in the coal mine.

  6. Linda Gorman says:

    States with high risk pools have already closed them down and are transitioning enrollees to the exchanges.

  7. Bob Hertz says:

    Reading a fuller story in the Jacksonville papers:

    a. these policy holders will be offered a ‘compliant’ Blue Cross policy that costs more. Not great news, but they need not be uninsured

    b. The policies in question were sold by Blue Cross since 2010, knowing that they would have to be made compliant. I doubt that Blue Cross told the policyholders about this.

    c. These policies were cheaper largely because they had lower annual and lifetime limits.

    On this issue I am very much opposed to the ACA.
    Instead of forcing everyone to buy a policy with no lifetime limits, they could have forced mandatory assignment on drug companies, hospitals, and oncologists. In other words, if a leukemia patients hits $200,000 in benefits from their insurance policy, then tell the darned providers that this is plenty of money to cure anyone.

    That is a little crude, but it is still the direction to go. If everyone had to buy a $3 million life insurance policy, we would have a life insurance crisis too.