Reports of Obamacare ‘Death Spiral’ Greatly Exaggerated, Says Standard & Poor’s

Blue Cross and Blue Shield Association health plans could turn a small profit on the ACA exchange marketplace next year, according to a report by Standard & Poor’s. The report says that the diagnosis “death spiral” attributed by ACA opponents to Obamacare doesn’t seem to apply to nearly three dozen ACA Blues across a swath of states. The plans, which lost less money last year than in previous years, are expected to break even this year, and may even turn a profit in 2018.

A Standard & Poor’s analyst tells the New York Times that “we are seeing the first signs in 2016 that this market could be manageable for most health insurers.” It’ll be interesting to see how this plays in Iowa, which last week saw the announcement by two insurers that they plan to exit the Iowa state exchange, and one of those exiting is the Blues plan Wellmark Blue Cross and Blue Shield. Aetna also said it will not participate in the Iowa exchange.

Deep Banerjee, an S.&P. credit analyst who helped write the report, tells the newspaper that “the market is still fragile, and he said insurers needed more time to figure out how to make the business work. While the market is very much alive, he said, it is ‘still in critical care. It still needs time to improve.’”

Source: New York Times