Health insurers struggle with 2015 Obamacare decisions

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Health insurers participating in public exchanges are just a month or two away from having to submit prices for their 2015 Obamacare plans. However, key facts required to make those decisions are still missing: final 2014 enrollment figures, the age and health of new policyholders, and which doctor and hospital networks the federal government will approve.

That information won’t be available until after the state and federal deadlines, which start as early as April in some areas. The lack of information has left many carriers undecided on which plans they will offer in which areas, and for how much.

“Are [rate increases] going to be double-digit, and are we going to get beat up because of the double digit, or are we going to just have to pull out of the program? Those questions can’t be answered until we see the population we have today,” said Aetna CEO Mark Bertolini during a CNBC interview.

The confusion also trickles down to producers, who by and large expect 2015 rates to escalate.

“We’ve been told the rates are going to be two years behind every year. Carriers won’t be able to accurately rate for this risk until 2016,” said Scott Leavitt, an Idaho insurance agency owner and former president of the National Association of Health Underwriters. “It’s going to make rates go through the roof.”

Leavitt also expressed fears that “some of the more responsible healthcare companies” will either sell out or go out of business. For Tim Jost, a health law expert with Washington and Lee University, the possibility of “some sort of shakeout” is indeed quite real—particularly for small and regional insurers that attracted only a few customers during this year’s open enrollment period.

Teresa Gutierrez, a producer in North Carolina, said the potential fallout may even be felt in the small business market.

“If we end up with the perfect storm of bad consequences, then it will definitely create a situation where rates are going to be significantly higher for everything. It would probably even impact small group clients, including small businesses,” Gutierrez noted. “Insurance carriers are in essence losing cash, and in some states, individual markets are tied with small group markets. They’re all part of a common pool.”

However, this year’s uncertainty doesn’t necessarily spell doom for Obamacare and its participating carriers and producers.

“[The national insurers] have been watching the markets, and if 2014 turns out to look better than expected, they may jump in,” Jost told Reuters.

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