About 103,000 people will have to find a new insurance policy because Blue Cross Blue Shield has announced it is leaving the Obamacare Exchange in Minnesota:
Blue Cross Blue Shield of Minnesota announced the decision late Thursday, citing heavy financial losses in that sector that showed no signs of reversing. Blue Cross will continue offering a separate plan that currently serves just 13,000 people via a subsidiary.
BCBS is not the first insurer to leave the Minnesota exchange. PreferredOne dropped out in 2015. Nor is this the first BCBS to leave an exchange. That honor goes to BCBS of New Mexico which left that state’s exchange in 2015 when regulators there denied a requested 24 percent premium increase. Others that have dropped out are Moda Health Plan, which left the Alaska exchange and was forced out of Oregon’s exchange; thirteen of the 23 Obamacare Co-Ops that have shut down; and, of course, UnitedHealthCare, which will be leaving most of the exchanges it participates in by 2017.
This is what happens when regulations like those found in Obamacare are forced on insurers: The young and healthy end up paying above market rates for insurance causing them to drop their coverage, thereby leaving insurance pools older and sicker and, hence, more expensive to cover. Premiums rise to cover the higher costs, causing even more young and healthy to drop their coverage, and the process, often referred to as a “death spiral,” repeats itself. In the process, a number of carriers suffer large losses, causing them to exit the market, as we are now seeing in the Obamacare exchanges. Fewer insurers means less competition which puts even more upward pressure on premiums. There is no consensus on how much premiums increase when an insurer leaves a market. Estimates vary from about five percent to eight percent.
You couldn’t keep the health plan you liked before Obamacare became operational. And, apparently you can’t keep it after, either.
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