Humana is taking point on this one. This from Dr Scott Gottlieb at AEIdeas:
Humana announced that it expects to tap the three risk adjustment mechanisms in Obamacare for between $250 and $450 million in 2014. This amounts to about 25% of the insurer’s expected exchange revenue. This money is needed to offset losses that the insurer will take as a result of slower enrollment in its Obamacare plans, and a skewed risk pool that weighs more heavily toward older and less healthy members than it originally budgeted.
More than half of the money will come from the $25 billion reinsurance pool that Obamacare provides (collected through a tax on employer-sponsored health plans). The other half will come mostly from the risk corridors.
Of course, President Barack Obama was counting on the “migration” of folks in the private health insurance market to the plans pushed through ObamaMart. However, as Humana is experiencing, and as other health plan providers (I hesitate to call them insurers, anymore) are discovering, that “migration” isn’t happening, and those that are buying have the wrong demographics for the law’s operation.
We know, though, that the “migration” was intended to be a forced migration, because during the 2010 Obamacare summit which our President hosted in the run-up to its party-line passage, he told [especially the first 30 seconds] then-Minority Whip Eric Cantor (R, VA) that “8 to 9 million people…might have to change their coverage….”
And those that are “changing” still aren’t responding in the Obamacare-required demographic breakdown.
Hence bailouts. Unless we get serious in the upcoming primaries and the fall elections.