Apparently, there are several insurance companies that have been deemed too big to fail. While reports of insurance companies in financial crisis have not made it into the mainstream, they were apparently anticipated by those who penned the AffordableCare Act, also known as Obamacare.
The 2000 plus page monstrosity includes a provision written into Section 1342 of the document, the “risk corridor,” which states that insurance companies will be covered for as much as 80 percent of their losses in the event that things don’t go as planned under Obamacare.
In order for Obamacare to really be successful, it’s been determined by financial experts that about 40 percent of the people who sign up for it must be 30 or younger and be a picture of near perfect health. At the present time, Obamacare is falling far short of that, though it’s also true that enrollment has only been open for a very short time.
The real point here is that it has been built into America’s new nationalized healthcare system that insurance companies will be bailed out in the event that they can’t keep up with the new insurance mandates. And if it works anything like the Wall Street Bailout did back around 2009, the little insurance companies who can’t make it financially will just be bought out by the bigger ones, who will essentially be owned by the federal government.
This would certainly add to the explanation as to why many insurance companies have done away with their cheaper plans and dropped the policies of those customers – though the common public excuse has been that those plans didn’t line up with the new government regulations for healthcare policies.
There may have also been some anticipation that those on cheaper plans were healthier and needed less insurance, but would hopefully still sign up for Obamacare. Whether that was sound logic or not still remains to be seen.
[Image: Beverly & Pack]